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BANK  ORGANIZATION 


JOHN  R.  B,AER 


1910 

PRESS  OF  J.    B.   ESSER,    KUTZTOWN,    PA. 


Copyright,  1910,  by 
The  Author. 


PREFACE. 

The  author  of  this  book  is  engaged  in  the  organization  and 
fostering  of  banks,  and  quite  often  he  is  called  to  towns  where 
local  organizers  have  been  trying  to  organize  a  banking  institu- 
tion and  failed,  or,  having  succeeded  in  organizing,  have  not  suc- 
ceeded in  making  the  venture  a  paying  one.  Very  often  these 
local  men  fail  because  they  are  trying  to  organize,  or  have  or- 
ganized a  banking  institution  where  the  bank  has  no  possible 
chance  for  existence,  either  because  the  banking  facilities  are 
already  adequate  in  that  town,  or  the  field  from  which  the  new 
bank  must  draw  its  patronage  is  too  limited,  or  if  the  field  is 
there,  they  may  be  trying  to  organize  before  the  project  is  ripe 
(the  writer  has  watched  territories  for  some  time  after  the  bank 
question  was  agitated  before  his  judgment  told  him  that  the 
proper  time  to  organize  had  arrived)  ;  or  the  failure  may  be 
attributed  to  wrong  methods  of  organizing.  The  first  three 
causes  of  failure  can  not  be  explained  aw^ay  in  any  text-book, 
but  must  come  with  a  judgment  ripened  by  experience,  but  for 
the  purpose  of  pointing  out  not  the  only  proper  method  of  or- 
ganizing, but  the  method  which  the  author  has  used  in  organ- 
izing a  large  number  of  banks,  all  of  which  are  paying  institu- 
tions, this  chapter  on  "  ORGANIZATION  OF  BANKS  "  has 
been  added  to  the  author's  book,  "  My  First  Year  in  Banking," 
of  which  this  is  merely  a  reprint. 

\Miile  mainly  intended  for  the  organization  of  National 
Banks,  the  system  is  also  suitable  for  State  Banks  and  Trust 
Companies — only  while  the  National  Banking  Laws  are,  of  course, 
uniform,  each  State  has  its  own  regulations  for  its  banking 
institutions,  and  the  information  concerning  the  legal  require- 
ments will  have  to  be  secured  from  the  proper  authorities  in 
the  State  in  which  you  are  organizing. 

Any  points  arising  during  the  organization  period  that  are 
not  clearly  brought  out  in  this  reprint  will  be  cheerfully  explained 
upon  request. 

JOHN  R.  BAER. 
Corcoran  BIdg.,  Washington,  D.  C. 

(ill) 

257868 


CONTENTS. 


Methods  of  Organization. 

A — Conversion. 

B — Reorganization. 

C — De  Novo  (new  bank). 

The  De  Novo  organization  period  resolves  itself  into  four 
natural  divisions,  viz : 

First. — Preliminary  Steps  Leading  to  Organization. 

A — Organization  De  Novo  (a  new  bank). 
B — A  Formal  Application  to  the  "  Comptroller  oi  the 
Currency,"  Washington,  D.  C. 

C — Are  Better  Banking  Facilities  Needed? 

Second. — Temporary  Organization. 

A — Formation  of  Organization  Board. 
B — Qualifications  for  Directorship. 
C — Selecting  Directors. 

Subscription  Blanks. 
Autographic  List. 
Price  of  Stock. 
D -Selling  Stock  ^  Prospectus. 

I  j  Cash  or  Instalments. 

I  Payments  }  Temporary  Certificates. 
1^  (^  Permanent  Certificates. 

K — Formation  of  Permanent  Board  of  Directors. 

Third. — Permanent  Organization. 

A — The  Proper  Officials  to  Administer  the  "  Oaths  of 
Office  "  and  to  Receive  "  Acknowledgments." 
B — Articles  of  Association. 
C — Organization  Certificates. 
D — Oaths  of  Directors. 
E — Signatures  of  Officers. 


▼i  BANK  ORGANIZATION. 

Fourth. — Preliminary  Work  Preceding  ''Opening  Day/' 

A — Certifying  to  Payment  of  50%  on  Bach  Share  of 
Capital  Stock. 

B — Preliminary  Examination  by  Special  Examiner. 

C — Comptroller's  Authority  to  Commence  the  Business 
of  Banking. 

D— Charter. 

E — Publication  of  Charter  and  Oath  of  Publication. 

F — Reserve  Agents. 

G — Purchasing  U.  S.  Bonds  and  Ordering  Circulation. 

H — Voting  Powers  of  Shareholders. 

I — Your  Washington  Agents. 

J — By-Laws. 

Banking  Room  and  Fixtures. 

Banking  Room  i  Temporary  Quarters. 
I  Permanent  Quarters. 

{Furniture  and  Fixtures. 
Vaults. 
Safes. 

The  Sovereign  States. 

States  and  Territories,  and  the  proper  officials  to  whom 
requests    for    information    concerning   the 
tion  of  State  Banks  should  be  addressed. 


DETAILED  STEPS 


IN  THE 


ORGANIZATION  OF  A  NATIONAL  BANK 


Are  better  banking  facilities  needed? 30 

1.  Formal  application  to  the  Comptroller  of  the  Currency,  Wash- 

ington, D.  C,  for  permission  to  oragnize 24 

2.  How  to  fill  out  application  to  organize  a  national  bank 26,   28 

A.  TEMPORARY  ORGANIZATION. 

3.  Formation  of  organization  board 32 

4.  Selecting    directors 32 

5.  Selling    stock 34 

6.  Price    of   stock 52,    52a 

7.  How  payments  are  to  be  made 52 

8.  Subscription  list 36,   38,   40,  42 

9.  Temporary  stock  certificate 54 

10.  Prospectus     .  .    44 

B.  PERMANENT  ORGANIZATION. 

11.  How  to  wind  up  the  affairs  of  temporary  organization  and  form 

the  permanent  organization 56 

12.  Executing    organization    papers: 

1.  Articles  of  association 66 

2.  Organization   certificate 74 

3.  Oaths   of   directors 80 

4.  Certificate  as  to  payment  of  capital  stock ?4,    88 

5.  Order  for  circulation lOG 

6.  Signatures  of  officers 82 

(135) 


136  BANK  ORGANIZATION. 

C.  PRELIMINARY  WORK  that  will  have  to  be  attended 

to  before  opening  for  business. 

PAGK. 

1.  Preliminary    examination 9  2 

2.  Publishing-  outhority  to  commence  the  business  of  banking  .  .    94 

3.  Appointing   reserve   agents 102 

4.  Purchasing  U.  S.  bonds  to  secure  circulation 102 

5.  Ordering  your  circulation 106 

6.  Engaging  your  Washington  agents 112 

D.  BY-LAWS. 

Form  of 114 


BANK  ORGANIZATION.  7 

Election  of  Members  and  Officers  of  the   Organization   Board, 
Organizing  the Bank  of 

A  MEETING  OF  THE  ORGANIZATION  BOARD  was 

held  at on  the day  of 

>  19  .    .  at  .    .    .  P.  M.,  in  the  office  of 

No 

Street,     There  were  present  Messrs 


The  members 


organized  by  selecting  Mr 

as  Chairman;  Mr 

as  Vice  Chairman  ;  Mr 

Secretary  and as  Treasurer. 

The  officers  of  the  Board  were  requested   to   forward   their 

signatures  to  The , 

as  Depository.     Adjourned  to  meet  at 

on at 

p.  m.  or  subject  to  call. 
Attest : 

Secretar5^ 


8                                       BANK  ORGANIZATION. 
Officers  and  Members   of  Organization  Board,  Organizing  the 
Bank  of 


Chairman    .    , 
Vice  Chairman 
Secretary     .    . 
Treasurer    .    . 


MEMBERS: 


BANK  ORGANIZATION.  9 

Members  and  Officer  of  Permanent  Board  of  Directors 
Appointed - 

President 

Vice   President 

Vice  President '. 

Vice  President 

Secretary     

MEMBERS : 


It  is  always  advisable  to  make  three  Vice  Presidents,  as  this  will  give 
you  an  opportunity  to  distribute  the  officers  among  your  country  directors, 
thereby  linking  a  stronger  chain  between  the  bank  and  your  future  out-of- 
town  patrons  than  if  you  kept  all  your  officers  confined  to  your  home  town. 


lo  BANK  ORGANIZATION. 


METHODS  OF  ORGANIZING, 


CONVERSION— REORGANIZATION— DE  NOVO. 
Conversion  of  State  Banks. 

Section  5154,  United  States  Revised  Statutes,  provides  for 
the  conversion  of  banks  existing  under  State  laws  into  National 
banking  associations  and  reads  as  follows : 

Any  bank  incorporated  by  special  law,  or  any  banking  institution 
organized  under  a  general  law  of  any  State,  may  become  a  National  as- 
sociation under  this  title  by  the  name  prescribed  in  its  organization  cer- 
tificate; and  in  such  case  the  articles  of  association  and  the  organization 
certificate  may  be  executed  by  a  majority  of  the  Directors  of  the  bank 
or  banking  institution ;  and  the  certificate  shall  declare  that  the  owners 
of  two-thirds  of  the  capital  stock  have  authorized  the  Directors  to  make 
such  certificate,  and  to  change  and  convert  the  bank  or  banking  institu- 
tion into  a  National  association.  A  majority  of  the  Directors,  after 
executing  the  articles  of  association  and  organization  certificate,  shall 
have  power  to  execute  all  other  papers,  and  to  do  whatever  may  be 
required  to  make  its  organization  perfect  and  complete  as  a  National 
association. 

APPLICATION    TO    CONVERT    A    STATE    BANK. 

The  name  of  the  place  should  form  a  part  of  the  title,  thus,  "  The 

First  National  Bank  of  A ,"  but  the  name  of   the   State   should 

not  be  included. 

Consideration  will  not  be  given  to  an  application  for  a  title  includ- 
ing the  word  "  First,"  if  a  National  bank  exsits  or  has  existed  at  the 
given  locality ;  nor  to  an  application  for  a  title  identical  with  that  of  a 
National  bank  heretofore  in  existence,  nor  to  one  materially  similar  to 
that  of  a  National,  State,  or  other  bank  existing  in  the  place. 

,    19—. 

To  THE  Comptroller  of  the  Currency, 

Washitigton. 
Sir:  Notice  is  hereby  given  that  we,  the  undersigned,  being  a  major- 
ity of  the  Board  of  Directors  of  "  The ,"'  having  a  paid 

in   and   unimpaired  capital   of  $ ,   intend  to  convert  the   said  bank 

into  a   National  banking  association,   in   accordance   with   the  provisions 
of  section  5154  of  the  Revised  Statutes  of  the  United  States,  under  the 


BANK    ORGANIZATION.  ii 

Minutes  of  the Meeting  of  Organization  Board. 


12  BANK  ORGANIZATION. 

title  "  The ,"  to  be  located  at ,  county  of , 

State  of  ,  with  capital  of  $ . 

We  request  that  the  title  be  reserved  for  a  period  of  sixty  days  and 

the  necessary  conversion  papers  and  instructions   sent  to , 

at . 


signatures  of  Directors. 


Residences. 


When  the  application  to  convert  has  received  the  Comp- 
troller's approval,  the  shareholders  should  execute  a  form  similar 
to  tlie  following,  bearing  in  mind  that  at  time  of  conversion  there 
can  be  no  change  in  amount  of  capital  stock,  par  value  of  shares, 
or  number  of  directors  unless  effected  under  State  law  prior  to 
execution  of  papers  other  than  application  for  authority  to  con- 
vert: 

AUTHORITY    FOR    CONVERSION    OF    STATE    BANK. 

We,  the  undersigned  stockholders  of  The ,  located  in  the , 


county  of  ,  State  of  ,  having  a  capital  of  dollars,  do 

hereby  authorize  and  empower  the  Directors  thereof  to  change  and  con- 
vert said  bank  into  a  National  banking  association  under  the  provisions 
of  section  5154  of  the  Revised  Statutes  of  the  United  States,  or  of  acts 
amendatory  thereof ;  and  we  do  also  authorize  said  Directors,  or  a  ma- 
jority thereof,  to  make  and  execute  the  articles  of  association  and  organ- 
ization certificates  required  to  be  made  or  contemplated  by  said  statutes ; 
and  also  to  make  and  execute  all  other  papers  and  certificates,  and  to  do 
all  acts  necessary  to  convert  the  said  bank  into  a  National  banking  asso- 
ciation, and  to  do  and  perform  all  such  acts  as  may  be  necessary  to  trans- 
fer the  assets  of  every  description  and  character  of  the  said  State  bank 
to  the  National  banking  association  into  which  it  is  to  be  converted,  so 
that  the  said  conversion  may  be  absolute  and  complete;  and  we  do  hereby 
assume,  and  authorize  the  said  Directors  to  assume,  as  the  name  of  the 
National  banking  association   into   which   the   said    State   bank   is   to  be 

converted,  "  The ;  "  and  we  do  hereby  appoint , , 

,  who  are  now  the  Directors  or  the  said  State  bank,  to  be  the  Direc- 


tors of  the  said  National  bank,  to  hold  their  offices  as  such  Directors  until 
the  regular  annual  election  of  Directors  is  held  pursuant  to  the  provi- 
sions of  said  Revised  Statutes,  and  until  their  successors  are  chosen  and 
qualified ;  and  we  do  hereby  authorize  the  said  Directors  of  the  said 
National  bank  to  continue  in  office  the  officers  of  the  said  State  bank,  or 
to  appoint  or  elect  others. 

In    witness    whereof    we   have   hereunto    set   our   hands   and   written 


BANK  ORGANIZATION.  13 

Minutes  of  the Meeting  of  Organization  Board. 


14  BANK  ORGANIZATION. 

against  our  names  the  number  of  shares  owned  by  us,  respectively,  this 
day  of  ,  A.  D. . 


Signatures  of  Stockholders.  i      ^o.  of  shares  owned 

bv  each. 


After  executing  this  paper  the  Directors  of  the  State  Bank 
have  full  powers  to  execute  all  papers  incidental  to  the  conver- 
sion of  the  hank  into  a  National  banking  institution. 

Upon  conversion  the  State  Bank  does  not  dissolve,  but  sim- 
ply changes  title,  and  the  newly  formed  National  Bank  assumes 
and  is  liable  for  all  obligations  and  may  enforce  all  contracts  of 
the  State  Bank. 

The  shareholders  of  the  State  Bank  having  authorized  its  con- 
version into  a  national  banking  association,  the  Directors  should 
execute  the  "  Articles  of  Association  "  and  "  Organization  Cer- 
tificate "  as  per  the  following  forms,  the  signatures  of  a  majority 
of  the  Directors  being  required : 

ARTICLES  OF  ASSOCIATION. 

(Executed  in  Duplicate.) 

We,  the  undersigned,   Directors   of   the ,   having  been 

authorized  by  the  owners  of  two-thirds  of  the  capital  stock  of  said  bank 
to  change  and  convert  the  said  bank  into  a  National  banking  association, 
under  the  provisions  of  section  5154  of  the  Revised  Statutes  of  the  United 
States,  or  of  acts  amendatory  thereof,  and  to  execute  articles  of  associa- 
tion, do  hereb}',  in  our  own  behalf,  and  in  behalf  of  the  stockholders 
whom  we  represent,  make  and  execute  the  following  articles  of  associa- 
tion : 

First. — The  title  of  the  association  into  which  the  said  State  bank  is  to 
be  changed  and  converted  shall  be  "The .'' 

Second. — The  place  w^here  its  l:anking  house  or  office  shall  be  located, 
and  its  operations  of  discount  and  deposit  carried  on,  and  its  general 
business  conducted  shall  be  the ,  county  of  ,  State  of . 

Third. — The  Board  of  Directors  shall  consist  of share- 
holders. 

Fourth. — The  regular  annual  meetings  of  the  shareholders  for  the 
election  of  Directors  shall  be  held  at  the  banking  house  of  this  associa- 
tion on  the  second  Tuesday  of  January  of  each  year;  but  if  no  election 
shall  be  held  on  that  day,  it  may  be  held  on  any  other  day,  according  to 
the  provisions  of  section  5149  of  the  Revised  Statutes  of  the  United  States, 
and  all  elections  shall  be  held  according  to  such  regulations  as  may  be 


BANK  ORGANIZATION.  15 

Minutes  of  the Meeting  of  Organization  Board. 


i6  BANK  ORGANIZATION. 

prescribed  by  the  Board  of  Directors,  not  inconsistent  with  the  prQvision 
of  the  National  banking  law  and  of  these  articles. 

Fifth. — The  capital  stock  of  this  association  shall  be thousand 

dollars,  divided  into  shares  of  one  hundred  dollars  each ;  but  the  capital 
may,  with  the  approval  of  the  Comptroller  of  the  Currency,  be  increased 
at  any  time  by  shareholders  owning  two-thirds  of  the  stock,  according 
to  the  provisions  of  an  act  of  Congress  approved  May  i,  1886;  and  in 
case  of  the  increase  of  the  capital  of  the  association,  each  shareholder 
shall  have  the  privilege  of  subscribing  for  such  number  of  shares  of  the 
proposed  increase  of  the  capital  stock  as  he  may  be  entitled  to,  accord- 
ing to  the  number  of  shares  owned  by  him  before  the  stock  is  increased. 

Sixth. — The  Board  of  Directors,  a  majority  of  whom  shall  be  a 
quorum  to  do  business,  shall  elect  one  of  its  members  president  of  this 
association,  who  shall  hold  his  office  (unless  he  shall  be  disqualified,  or 
be  sooner  removed  by  a  two-thirds  vote  of  all  of  the  members  of  the 
board)  for  the  term  for  which  he  was  elected  a  director.  The  directors 
shall  have  poweV  to  elect  a  vice-president,  who  shall  also  be  a  mem- 
ber of  the  Board  of  Directors,  and  who  shall  be  authorized,  in  the  ab- 
sence or  inability  of  the  president  from  any  cause,  to  perform  all  acts 
and  duties  pertaining  to  the  office  of  president,  except  such  as  the  presi- 
dent only  is  authorized  by  law  to  perform,  and  to  elect  or  apopint  a 
cashier  and  such  other  officers  and  clerks  as  may  be  required  to  trans- 
act the  business  of  the  association ;  to  fix  the  salaries  to  be  paid  to  them 
and  continue  them  in  office,  or  to  dismiss  them,  as,  in  the  opinion  of  a 
majority  of  the  Board,  the  interests  of  the  association  may  demand. 

The  directors  shall  have  power  to  define  the  duties  of  the  officers 
and  clerks  of  the  association ;  to  require  bonds  from  them  and  to  fix 
the  penalty  thereof ;  to  regulate  the  manner  in  which  elections  of  Direc- 
tors shall  be  held,  and  to  appoint  judges  of  the  elections;  to  make  all 
by-laws  that  it  ma}-^  be  proper  for  them  to  make,  not  inconsistent  with 
law,  for  the  general  regulation  of  the  business  of  the  association  and  the 
management  of  its  affairs,  and  generally  to  do  and  perform  all  acts  that 
it  may  be  legal  for  a  Board  of  Directors  to  do  and  perform  under  the 
Revised  Statutes  aforesaid. 

Seventh. — This  association  shall  continue  for  the  period  of  twenty 
years  from  the  date  of  the  execution  of  its  organization  certificate,  un- 
less sooner  placed  in  voluntary  liquidation  by  the  act  of  its  shareholders 
owning  at  least  two-thirds  of  its  stock,  or  otherwise  dissolved  by  author- 
ity of  law. 

Eighth. — These  articles  of  association  may  be  changed  or  amended 
at  any  time  by  shareholders  owning  a  majority  of  the  stock  of  the  asso- 
ciation in  any  manner  not  inconsistent  with  law ;  and  the  Board  of  Direc- 
tors, or  any  three  shareholders,  may  call  a  meeting  of  the  shareholders 
for  this  or  any  other  purpose  not  inconsistent  with  law  by  publishing  no- 
tice thereof  for  thirty  days  in  a  newspaper  published  in  the  town,  city,  or 
county  where  the  bank  is  located,  t  by  mailing  to  each  shareholder  notice 
in  writing  thirty  days  before  the  time  fixed  for  the  meeting. 


BANK  ORGANIZATION.  17 

Minutes  of  the Meeting  of  Organization  Board. 


i8 


BANK  ORGANIZATION. 


In  witness  whereof  we  have  hereunto  set  our  hands  this 
of . 


day 


ORGANIZATION  CERTIFICATE. 
We,  the  undersigned  Directors  of  the ,  having  been  duly- 
authorized  by  the  owners  of  two-thirds  of  its  capital  stock  to  change  and 
convert  said  bank  into  a  National  banking  association,  and  to  make  the 
necessary  organization  certificate,  under  the  provisions  of  section  5154 
of  the  Revised  Statutes  of  the  United  States,  or  of  acts  amendatory  there- 
of, do  sign  and  execute  the  following  organization  certificate,  which  we 
hereby  declare  we  are  authorized  to  make  by  the  owners  of  two-thirds  of 
the  capital  stock  of  the  said  State  bank. 

First. — The  title  of  this  association  shall  be  "  The ." 

Second.— The  said  association  shail  be  located  and  continued  in  the 
of  ,  county  of ,  and  State  of ,1  where  its  opera- 


dollars 


tions  of  discount  and  deposit  are  to  be  carried  on. 

Third.— The  capital  stock  of  this  association  shall  be  — 
($ ),  divided  into shares  of  dollars  each,  as  it  is  now- 
divided  in  the  said  State  bank.  2 

Fourth. — The  name  and  residence  of  each  of  the  stockholders  of  the 
said  State  bank,  which  is  to  become  a  National  bank  under  the  provisions 

of  the  Revised  Statutes  aforesaid,  and  the  number  of  shares  of  

dollars  each  held  by  each  stockholder  ars  as  follows : 


Name. 


Residence. 


No.  of  shares. 


Fifth. — The  certificate  is  made  in  order  that  the  said  State  bank  and 
the  stockholders  thereof  avail  themselves  of  the  advantages  of  the  afore- 
said Revised  Statutes,  and  that  the  said  State  bank  may  be  changed  and 
converted  into  a  National  banking  association  under  the  foregoing  title. 

In  witness  whereof  we  have  hereunto  set  our  hands  this  day 

of . 


The  signatures  of  a  majority  of  Directors  required. 


If  Bank  nas  branch  or  branches  add  after  the  words  State  of "  with   branch 

has  been  assigned 


2  If  Bank  has  bianch  or  branches  add  "of  which  amount  $ 
and  trarsf  erred  to  the  branch  at ." 


BANK  ORGANIZATION.  19 

Minutes  of  the Meeting  of  Organization  Board. 


TO  BANK  ORGANIZATION. 

State  of , 

County  of ,  ss: 

Before  the  undersigned,  a of  ,  personally  appared 


Directors  of  the  aforesaid  State  bank,  to  me  well  known,  who  severally- 
acknowledged  that  they  executed  the  foregoing  certificate  for  the  pur- 
poses therein  mentioned. 

Witness  my  hand  and  seal  of  office  this  day  of . 

[OFI^ICIAI,  SEAI,  OF  OFFICER.]  . 


CERTIFICATE  REIvATIVE  TO  PAYMENT  OF  CAPITAL  STOCK  OF 
STATE  BANK  CONVERTING  INTO  NATIONAL  BANK. 

It  is  hereby  certified  that  the Bank of  , 


which  is  to  be  converted  into  "  The  ■_ —   National Bank   of 

,"  in  conformity  with  the  provisions  of  section  5154  of  the  Revised 

Statutes  of  the  United  States,  authorizing  the  conversion  of  "  any  bank 
incorporated  by  special  law  or  any  banking  institution  organized  under  a 
general  law  of  any  State,"  has  a  paid  in  and  unimpaired  capital  of  $ . 


President. 
or 


Cashier. 

State  of , 

County  of ,  ss: 

Subscribed  and  sworn  to  before  the  undersigned,  a —  of  the  said 

county,  this day  of ,  19 — . 

[OFFICTAI,  SEAL  OF  OFFICER.]  . 

[Office.] . 


Duly  qualified  Directors  of  a  State  Bank  being  converted 
into  a  national  bank  may  continue  as  directors,  regardless  of  the 
number  of  shares  owned,  imtil  the  first  annual  election  is  held 
when,  to  be  eligible  for  reelection,  they  must  ozvn  the  number  of 
shares  required  by  the  national  bank  act.  The  oaths  should  be 
taken  as  directors  of  the  national  bank.  Unless  officers  are  re- 
appointed by  the  directors  of  the  national  bank  subsequent  to 
their  qualification,  the  form  requiring  the  signatures  of  the  of- 
ficers of  the  national  bank  (a  copy  of  which  follows)  should  show 
date  of  appointment  by  the  directors  of  the  State  bank : 


BANK  ORGANIZATION.  21 

Minutes  of  the —  Meeting  of  Organization  Board 


22  BANK  ORGANIZATION. 

OFFICIAI.  SIGNATURES. 

Official  signatures  of  the  president,  vice-president,  cashier,  and  assist- 
ant cashier  of  the  National  Bank,  located  at ,  appointed  at 

a  meeting  of  the  Board  of  Directors  of  the State  Bank,  held  on 

the day  of ,  19 — . 

[SEAI,  OF  BANK.]  ,  President. 


J'ice-Prcsidcuf. 
Cashier.. 
Assistant  Cashier. 


Branch  Banks. 

The  only  provision  in  the  national  bank  act  relating  to  branch 
banks  is  found  in  section  5i~55,  United  States  Revised  Statutes, 
and  reads  as  follows : 

It  shall  be  lawful  for  any  bank  or  banking  association,  organized 
ander  State  laws  and  having  branches,  the  capital  being  joint  and  as- 
signed to  and  used  by  the  mother  bank  and  branches  in  definite  proportions, 
to  become  a  National  banking  association  in  conformity  with  existing  laws, 
and  to  retain  and  keep  in  operation  its  branches,  or  such  one  or  more  of 
them  as  it  may  elect  to  retain.     *     *     * 

The  granting  of  this  special  privilege  to  State  banks  and  the 
absence  of  any  similar  provision  in  the  law  with  respect  to  banks 
of  primary  organization  have  always  been  construed  by  the  Comp- 
troller to  imply  that  banks  of  the  latter  class  were  not  permitted 
to  have  branches.  The  section  cited  absolutely  restricts  branch 
banks  of  converted  associations  to  such  as  have  a  definite  pro- 
portion of  the  capital  of  the  parent  bank  assigned  to  them,  and 
it  is  not  to  be  assumed  that  the  law  contemplated  that  the  asso- 
ciations of  primary  organization  should  be  permitted  to  assign 
any  portion  of  their  capital  to  and  operate  branches. 

REORGANIZATION. 

A  State  bank  can  liquidate,  then  reorgaiii.ce  itself  into  a  Na- 
tional bank,  the  bank  then  purchasing  the  approved  assets  of  the 
liquidated  association.  The  capital  stock  must  be  represented 
by  nothing  but  actual  cash,  and  if  the  capital  of  the  bank  to  be 
converted  does  not  comply  with  the  requirements  of  the  U.  S. 
Bank  Act,  it  must  be  made  to  conform  before  conversion  can 
be  effected. 


BANK  ORGANIZATION.  23 

Minutes  of  the Meeting  of  Organization  Board. 


24  BANK  ORGANIZATION. 

Conve:rsion  of  Private  Banks. 

The  law  is  silent  so  far  as  the  conversion  of  private  banks 
is  concerned ;  therefore,  the  only  safe  plan  is  by  liquidating  and 
reorganizing. 

ORGANIZATION   DE   NOVO. 

(Organizing  a  New  Bank.) 

FORMAI.    APPI.ICATION   TO    THE    COMPTROLLER    OF    THE    CUR- 
RENCY, Washington,   D.   C. 

\  the  Five  (5)   ORIGINAL  applicants. 

(Sect.  5133,  U.  S.  R.  S.) 

After  not  less  than  five  of  the  representative  citizens  of  a  town 
have  decided  to  organize  a  National  bank,  the  first  thing  to  do 
is  to  write  to  the  Comptroller  of  the  Currency,  Washington,  D. 
C,  asking  for  an  application  blank. 

(The  writer  uses  the  following  form  letter.) 

To    THE    CoMPTROfJ.ER    OF    THE    CURRENCY, 

Washington,  D.  C. 

Sir:  This  town  being  in  need  of  better  banking  facilities,  a  meeting 
was  held  and  the  banking  needs  of  the  town  discussed,  and  it  was  decided 
to  organize  a  National  Bank. 

Kindly  mail  application  blank  to 


State  Banks  and  Trust  Companies,  as  a  rule,  do  not  require  any  appli- 
cation blanks. 

Upon  receipt  of  your  letter  at  Washington,   the  following 
application  will  be  mailed  to  you : 

APPLICATION  TO   ORGANIZE  A  NATIONAL  BANK. 

The  name  of  the  place  should  form  a  part  of  the  title,  thus,  *'  The 

First  National  Bank  of  A ,"  but  the  name  of  the  State  should  not 

be  included. 

Consideration  will  not  be  given  to  an  application  for  a  title  including 
the  word  "  First  "  if  a  National  bank  exists  or  has  existed  at  the  given 
locality ;  nor  to  an  application  for  a  title  identical  with  that  of  a  National 
1)ank  heretofore  in  existence,  nor  to  one  materially  similar  to  that  of  a 
National,  State  or  other  bank  existing  in  the  place. 

The  application  must  be  signed  by  at  least  five  prospective  share- 
holders and  should  be  indorsed  by  three  prominent  persons,  judge  of 
court,  postmaster,  and  mayor  or  other  public  officials. 


BANK  ORGANIZATION.  25 

Minutes  of  the Meeting  of  Organization  Board. 


26 


BANK  ORGANIZATION. 


.19 


To  the  Comptroller  of  the  Currency, 

Washington, 
Sir : 

Notice  is  hereby  given  that  we,  the  u?idersigned,  being  natural 
persons ^  and  of  lawful  age,  intend,  with  others,  to  organize  a  Na- 
tional Banking  Association,  under  the  title  of   ''The 

^^^.^^'^.^^:.^. ,''   to  be    located 

at ,  County  of- , 

State  of- - _. ,    with  capital 

of  $. ^L^oi'.^/^:A ,   to  succeed  the ^§^'.^}^f^.^^:A bank 

of Population, 

We  request  that  the  title  be  reserved  for  a  period  of  sixty  days, 
a7id  organization  blanks  and  i?i^tructio7is  sent  to 

(See  Note  No.  4)  -/ 


Signatures  of  applicants. 

Residences. 

Bu.siness. 

Financial  strength 
in  figures. 

' 

The  signers  of  this  appHcation  are  known  by  me  to  be  reputable  citi- 
zens ;  the  information  in  reference  to  their  business  and  financial  stand- 
ing is  in  my  opinion  correct ;  the  statement  as  to  population  authentic, 
and  I  am  of  the  belief  that  the  conditions  locally  are  such  as  to  insure 
success  if  the  bank  is  organized  and  properly  managed. 

,  Judge  of  Court. 

,  Postmaster. 

,  Mayor, 


BANK    ORGANIZATION.  27 

Minutes  of  the Meeting  of  Organization  Board. 


28  BANK  ORGANIZATION. 

NOTE  ONE— THE  TITLE— NATIONAL  BANKS. 

The  name  of  the  town  must  be  a  part  of  your  title,  i.  c,  ''  The 
New  Tripoh  National  Bank,"  "  The  Farmers'  National  Bank  of 
Kutztown,"  but  adding  the  name  of  the  town  as  "  The  Kutztown 
National  Bank  of  Kutztown,"  the  "  of  Kutztown  "  being  super- 
fluous, would  not  be  allowed. 

Make  the  title  as  brief  as  possible.  The  writer  knows  where 
the  Department  took  exception  to  unduly  long  and  vague  titles. 

You  can  not  get  the  title  "The  First  National  Bank  of 

if  at  any  time  previous  to  your  organization  there  had  been  a 
bank  of  that  title,  nor  can  you  have  any  title  that  might  lead  the 
public  to  confuse  your  institution  with  that  of  any  other  bank. 

A  great  deal  of  useless  correspondence  can  be  avoided  if 
you  decide  definitely  upon  your  bank's  title  before  filling  in  your 
application  blank.  Do  not,  after  the  organization  is  practically 
completed,  decide  to  change  the  name.  You  will  always  find  the 
Comptroller  willing  to  oblige  you  whenever  he  can  do  so,  yet 
if  you  stop  to  consider  that  your  bank  is  but  one  of  a  great 
number  being  organized  at  that  particular  time,  you  will  feel 
more  like  doing  away  with  all  unnecessary  complications. 

THE  TITLE— STATE  BANKS. 

State  laws  do  not,  as  a  rule,  require  the  names  of  towns  to 
be  a  part  of  the  corporate  title. 

NOTE  TWO— CAPITAL  STOCK— NATIONAL  BANKS. 

The  minimum  amount  must  be  $25,000  and  this  only  in 
places  of  3000  population  or  less.  In  places  of  6000  or  less  the 
minimum  capital  must  be  $50,000,  if  less  than  50,000  the  capital 
must  be  $100,000,  and  all  places  over  50,000  the  capital  must  be 
not  less  than  $200,000. 

CAPITAL  STOCK— STATE  BANKS. 

States  vary  in  their  capital  stock  requirements,  and  the  de- 
sired information  must  be  secured  from  your  State  Banking 
authorities. 

NOTE  THREE. 

Fill  in  the  name  of  the  party  who  is  acting  as  the  Secretary 
of  your  Organization  Board; 


BANK  ORGANIZATION.  29 

Minutes  of  the Meeting  of  Organization  Board. 


30  BANK  ORGANIZATION. 

ARE  BETTER  BANKING  FACILITIES  NEEDED? 

In  order  to  provide  against  the  organization  of  unnecessary 
banks,  and  to  keep  in  check  those  who  are  in  the  business  of 
promoting  banks,  the  Government  will  not  grant  you  permission 
to  organize  unless  you  can  show  just  reasons  for  the  same — the 
writer  reprints  a  copy  of  a  letter  of  inquiry  such  as  is  mailed  by 
the  Comptroller  to  the  original  petitioners  for  permission  to  or- 
ganize, and  upon  the  answers  received  to  these  letters  and  the 
later  examination  made  by  some  accredited  party  designated  by 
the  Department,  depends  the  final  action  and  seals  the  fate  of 
your  petition. 

Treasury  Department. 

Washington,  D.  C, ,  19  —  . 

Mr.  , 


Sir: 

An  application  signed  by  you  and  others  has  been  received, 

dated ,   for  authority  to  organize  "  The  First  National 

Bank  of ,"  capital  $25,000,  the  request  being  made  that 

blanks  for  the  organization  of  the  bank  be  mailed  to , 


For  your  information  it  may  be  stated  that  it  is  the  policy 
of  the  Comptroller  not  to  permit  of  the  organization  of  a  bank 
in  a  village  or  town  where  the  deposits  which  would  naturally 
come  to  it  from  the  surrounding  community  will  not  be  such  as 
to  sustain  a  prosperous  and  profitable  bank.  You  are  requested, 
therefore,  to  promptly  advise  this  office  whether  you  have  given 
the  case  due  consideration  and  are  reasonably  certain  that  there 

is   sufficient   business   at  ,   and   local   conditions   are 

such  as  to  insure  success  if  the  bank  is  organized  and  properly 
managed. 

Please   advise   whether   the   demand    for   banking   facilities 

at  originated  with  the  signers  of  the  application  or 

some  corporation  or  persons  engaged  in  promoting  the  organiza- 
tion of  national  banks. 

Upon  receipt  of  reply  to  this  letter,  approval  of  the  appli- 
cation will  have  consideration. 

By  direction  of  the  Comptroller. 
Respectfully, 


Chief,  Organization  Division. 


BANK  ORGANIZATION.  31 

Minutes  of  the -  Meeting  of  Organization  Board. 


32  BANK  ORGANIZATION. 

If  upon  due  and  impartial  examination  the  Comptroller 
approves  of  your  application,  he  will  so  advise  you  and  furnish 
all  necessary  blanks,  with  full  instructions  for  their  proper  exe- 
cution, and  you  are  then  ready  to  begin  active  work,  and  you 
will  be  granted  60  days  in  which  to  complete  your  organization. 
You  can,  however,  receive  an  extension  of  time  if  you  find  that 
the  allotted  time  is  not  sufficient  to  complete  your  organization. 

Your  application  having  been  granted  and  your  papers  and 
instructions  received,  your  next  step  will  be  to  appoint  your 

ORGANIZATION  BOARD. 

The  five  original  petitioners  should  add  to  their  number  such 
men  of  prominence  as  they  can  interest  in  the  project,  and  the 
writer  does  not  add  to  his  organization  boards  any  person  who 
does  not  contemplate  standing  for  the  directorship,  so  the  sug- 
gestions found  under  the  caption  ''  Selecting  Your  Directors  " 
should  be  taken  in  conjunction  with  this  article. 

NUMBER  OF  AND  QUALIFICATIONS  FOR  DIRECTOR- 
SHIP—NATIONAL. 

Sect.  5145,  R.  S.,  places  the  minimum  number  of  directors  at  5, 
there  being  no  maximum,  and  Sect.  5146,  R.  S.,  provides  that  each 
director  must  own  in  his  own  right  at  least  10  shares  of  stock  if 
the  capital  of  the  bank  is  over  $25,000,  otherwise  he  must  own 
at  least  five  shares.  That  at  least  three-fourths  of  the  directors 
must  have  resided  in  the  State  or  Territory  in  which  the  bank 
is  located  for  a  year  or  more  preceding  their  election,  and  must 
be  residents  therein  during  their  continuance  in  office. 

That  no  part  of  the  stock  held  by  a  director  shall  be  pledged 
in  any  manner. 

NUMBER  OF  AND  QUALIFICATIONS  OF  DIRECTOR- 
SHIP—STATE. 

No  uniform  requirements. 

SELECTING  DIRECTORS. 

Before  you  should  attempt  to  sell  any  shares  in  your  institu- 
tion, you  should  make  up  a  "  Temporary  Board  of  Directors," 


BANK  ORGANIZATION.  33 

Minutes  of  the Meeting  of  Organization  Board. 


34  BANK  ORGANIZATION. 

known  as  the  ''  Organization  Board,"  the  sanie  to  beeome  the 
*'  Permanent  Board  of  Directors  "  when  your  "  Articles  of  In- 
corporation "  have  been  duly  executed.  By  *'  Articles  of  Incor- 
poration is  meant  the  "  Articles  of  Association  "  and  "  The  Or- 
ganization Certificate,"  as  the  date  of  the  latter  determines  the 
date  of  the  *'  Organization  Board's  "  becoming  a  body  corporate. 
Your  Board  should  consist  of  the  most  conservative  men  in  your 
locality.  Men  who  are  held  in  the  highest  esteem,  for  your  bank 
zi'ill  be  judged  by  the  sfaiiding  of  the  men  comprising  its  Board; 
and  do  not  forget  that  the  possession  of  mere  wealth  is  not  neces- 
sarily a  safe  criterion  to  go  by  while  judging  a  man's  qualifica- 
tions for  a  directorship,  for  a  man  who  has  acquired  several 
thousand  dollars  by  his  own  unaided  efforts,  is  often  more  worthy 
of  respect  than  the  man  who  merely  inherited  a  fortune  that 
somebody  else  had  accumulated. 

Try  and  get  men  who  have  made  a  success  of  their  own 
business,  and  get  representative  men  from  various  lines  of  busi- 
ness, thereby  diversifying  the  busiiiess  interests  of  your  town, 
for  if  you  get  too  many  of  one  and  the  same  business  on  the 
board,  your  bank  may  be  nick-named  after  that  particular  busi- 
ness. The  writer  has  known  of  one  bank  that  had  five  landlords 
on  its  board  and  the  bank  was  called  the  ''  Hotel  Keepers'  Bank," 
and  in  spite  of  everything  they  could  do,  the  name  stuck  until 
they  removed  three  of  the  hotel  men  and  substituted  others. 
Renieynbcr,  it  is  the  personality  of  the  man  that  counts,  and  not 
his  money;  therefore,  go  slow  and  be  sure  and  get  the  strongest 
man  in  each  locality.  And  right  here  let  me  tell  you,  do  not 
place  too  many  of  your  townsmen  on  your  board,  but  take  your 
map  and  draw  a  circle  clean  around  your  town,  then  pick  out 
the  locations  from  which  you  can  reasonably  expect  to  draw 
your  business  and  place  your  directors  there ;  in  this  manner 
complete  the  circle,  and  by  so  doing  you  will  concentrate  the 
business  and  draw  it  to  your  town,  zvhich  is  one  of  the  main 
reasons  that  prompted  yott  to  organi/:e. 

SELLING  STOCK. 

Having  filled  your  Organization  Board  and  thereby  selected 
your  future  directors,  you  are  now  ready  to  secure  subscriptions 
to  your  capital  stock.  Make  each  one  of  your  directors  a  nu- 
cleus around  which  to  sell  your  shares,  allowing  each  director 


BAXK  ORGANIZATION.  35 

Minutes  of  the  Meeting  of  Organization  Board. 


36  BANK  ORGANIZATION. 

to  give  you  his  own  list  of  probable  shareholders  in  his  terri- 
tory and  restrict  your  shareholders  to  those  whose  names  you 
find  on  these  lists,  and  by  the  time  you  have  completed  the  cir- 
cle you  will  find  your  shares  all  sold  and  every  share  thus  sold 
will  represent  future  business,  for  by  selling  along  these  lines 
you  will  not  sell  any  shares  to  those  who  would  buy  simply  for 
the  sake  of  safely  investing  their  surplus  cash,  but  to  those 
who,  having  the  welfare  of  the  bank  at  heart,  will  not  only  be- 
come depositors  themselves,  but  will  influence  as  many  others  as 
they  can. 

Follow  this  plan  faithfully  and  you  will  be  surprised  at 
the  result,  as  many  years'  experience  has  fully  proven  the  wis- 
dom of  this  course. 

By  following  the  above  plan  the  writer's  company  often  suc- 
ceeds in  getting  from  75  to  200  shareholders  for  a  $25,000  or 
$50,000  bank. 

SUBSCRIPTION  LIST. 

The  Bank  Act  does  not  provide  for  the  filing  of  a  list  of 
the  subscribers  to  the  Capital  Stock  of  a  National  Bank,  there- 
fore no  blank  subscription  list  is  furnished  by  the  Government. 

USUAL    rORM    or    SUBSCRIPTION    PAPER. 

We,  whose  names  are  hereunto  signed,  do  hereby  subscribe,  in  the 
proportion  hereunto  set  opposite  our  respective  names,  for  the  stock  of 
a  National  Banking  Association  to  be  organized  under  the  laws  of  the 

United   States  with  a  capital   stock  of  thousand  dollars,  divided 

into shares  of  a  par  value  of  One  Hundred  Dollars  each,  the  said 

National  Banking  Association  to  be  located  in  the  of State 

of ,  and  to  be  called  "  The . 


signatures. 


Residence. 


Shares. 


BANK  ORGANIZATION.  37 

Minutes  of  the Meeting  of  Organization  Board. 


38  BANK  ORGANIZATION. 

The  writer  prefers  and  uses  the  following  individual  subscription  form 


J^o APPLICATION  FOR  SHARES  IN 

THE  FARMERS'  NATIONAL  BANK 

OF  NEW  TRIPOLI,  PA. 

To  the  Organization  Board  for  the  Proposed  Bank: 

I  subscribe  for shares  of  the  Capital  vStock  in  a  bank  to  be  organ- 
ized by  you  according  to  law  and  agree  to  paj^  for  same  by  monthly  paj'iuents  as 
called  for  by  your  Organization  Board  or  the  Directors. 

I  agree  that  the  amount  of  the  Bank's  Capital  is  to  consist  of  all  the  shares  sold 
and  will  be  at  least  the  minimum  authorized  here  by  law.  Each  share  sold  shall  be 
issued  at  $125.00,  of  which  par  value  is  $100  and  $25.  a  subscribed  premium,  is  for  un- 
divided profits,  part  of  which  you  may  use  for  an  Organization  Fund  to  purchase 
books,  checks  and  supplies  and  pay  legal  and  other  expenses  incidental  to  organiza- 
tion and  for  securing  the  bank's  capital,  as  agreed  hy  the  Organization  Board,  a  quo- 
rum of  which  is  authorized  to  act  as  n\y  attorneys-in-fact  in  all  affairs  lelating  to 
securing  subscriptions,  organization  and  charter,  and  apportioning  shares.  This  sub- 
scription is  made  in  connection  with  the  subscriptions  of  others  for  the  same  object, 
on  the  .same  terms.  I  understand  no  per.sou  has  authority  to  vary  or  waive  printed 
terms  on  this  paper  or  your  agreement  with  depository. 

I  pay  % by  check  or  money  herewith  as  evidence  of  m^-  good  faith. 

Witness  mj-  hand  and  seal  this day 

of 1909. 

■WITNESS  :  • [SEAI^] 

Name  in  full. 


P.  O.  Address 


4K^  Plea.se  pay  55  a  share  on  subscription  to  vSecretary  of  Organization  Board 
when  making  subscription.     Make  Check  payable  to  Collegeville  National  Bank,    ; 
Collegeville,  Pa.  i 


ORGANIZATION  BOARD  FOR 

THE  FARMERS'  NATIONAL  BANK 

New  Tripoli,  Pa., -. 190 

Received  of  Mr. - - 

.for  the  first  payment  of  Y^'we  Dollars  on  each  of 

shares  of  stock  at  $125  a  share^  subscribed  in  this  proposed  Bank, 
Payable  i7i  monthly  instalments,  as  called  for  by  the  Orgayiiza- 
tion  Board  or  the  Directors, 

$■ Secretary. 


BANK  ORGANIZATION.  39 

Minutes  cf  the Meeting  of  Organization  Board. 


40  BANK  ORGANIZATION. 

This  individual  form  is  preferable,  for  as  yon  notice  the 
money  collected  on  snbscription  is  placed  on  deposit  in  a  national 
bank  for  safe  keeping,  instead  of  into  the  hands  of  one  of  the 
members  of  the  organization  board  or  the  promoter.  This 
makes  the  selling  of  the  stock  mnch  easier,  as  it  insnres  the 
subscribers  of  the  safety  of  their  funds  and  they  feel  perfectly 
safe,  knowing  that  if  for  any  reason  the  bank  fails  to  organize, 
they  will  have  all  their  money  returned  to  them. 

"This  Individual  Subscription  Form  is  not  a  legal  form,  nei- 
ther is  the  Organization  Board  as  yet  a  legal  body,  therefore,  you 
can  not  hold  any  subscriber  who  at  this  time  wishes  to  withdraw 
his  subscription."  This  is  the  writer's  contention,  although  some 
authorities  claim  that  all  subscribers  can  be  held  liable;  how- 
ever, it  does  not  not  pay  to  contend  with  would-be  subscribers, 
as  you  will  find  that  the  shares  will  sell  readily  enough  and  you 
can  not  afford  to  make  any  enemies  for  the  new  institution,  so 
it  is  the  writer's  unfailing  policy  that  whenever  any  subscriber 
asks  to  have  his  subscription  paper  returned,  to  do  so  without 
any  hesitancy  whatsoever. 

However,  after  the  Board  becomes  a  body  corporate,  which 
will  be  just  as  soon  as  the  "Articles  of  Association"  and 
the  "Organization  Certificate"  have  been  duly  executed  (Sec- 
tion 136  R.  S.)  and  the  Directors  have  accepted  the  subscription 
by  issuing  the  subscriber's  certificate,  offering  him  an  oppor- 
tunity to  vote  his  stock ;  then  the  subscription  being  recognized, 
the  subscriber  is  bound  for  payment,  if  the  Board  wishes  to 
hold  him. 

AUTOGRAPHIC  LIST. 

You  will  find  an  "  Autographic  List,"  such  as  is  shown  be- 
low of  material  assistance  in  selling  your  stock,  as  it  helps  to 
inspire  the  would-be  subscriber  with  confidence  in  the  project 
to  see  the  signatures  of  the  officers  and  the  seal  of  the  National 
Bank  vouching  for  the  comparative  safety  of  the  funds  during 
the  organization  period. 

This  list  was  suggested  by  Mr.  L.  O.  Davis,  of  Lancaster,  Pa.,  the  wri" 
ter's  partner  in  the  organization  of  banks. 


BANK  ORGANIZATION.  41 

Minutes  of  the Meeting  of  Organization  Board. 


42 


B A  \ K   nVt  G  \  \  [  7.  \  T  T O X . 


•"o  i-niom   It  ^'riv  conoern:- 


r?  <  -.f «    no  ? 


sni}»c:'"i" 


.^ 


/    ,.  -^ 


/ 


^^^^^^^^t:^-^^ 


j>' 


BANK    ORGANIZATION.  43 

Minutes  of  the Meeting  of  Organization  Board. 


44  BANK  ORGANIZATION. 

PROSPECTUS. 

The  author's  firm  issues  weekly  prospectus  and  finds  that 
it  pays.  Mail  same  to  every  name  on  your  P.  O.  list,  and  when 
you  come  to  sell  them  shares  in  your  bank,  they  will  know  all 
about  the  proposition. 


THE  FARMERS'  NATIONAL  BANK  OF  McALLISTERVILLE,  PA. 

ORGANIZING.  9 

The  Business  Men  and  other  Citizens  of  McAUisterville  and  vicinity  who  are 
organizing  "  The  Farmers'  National  Bank,"  desire  to  express  their  sincere  appre- 
ciation of  the  splendid  support  and  encouragement  they  have  received.  The  or- 
ganization is  daily  receiving  added  support  from  merchants,  farmers,  and  thrifty 
citizens  generally,  who  believe  a  National  Bdnk  will  be  a  valuable  business  aid  to 
the  community  and  that  its  stock  is  an  ideal  investment  both  for  security  and  profit. 

The  growth  of  the  movement  is  evidenced  by  the  way  the  subscriptions  are 
pouring  in  and  the  size  and  enthusiasm  of  the  Thursday  evening  meetings,  which 
have  already  outgrown  the  original  meeting  place  and  forces  us  into  a  larger 
room,  where  each  meeting  night  some  subject  referring  to  "Banking  and  Its 
lyaws  "  will  be  discussed. 

Shares  will  be  .sold  at  $iio  each.  Subscribers  are  expected  to  pay  $5  per  share 
when  making  subscription,  the  balance  to  be  paid  as  follows  :  $15  per  share  June 
15th  ;  540,  July  5th  ;  $io,  August  i6th  ;  510,  September  15th  ;  $10,  October  15th  ;  $10, 
November  15th  ;  $10,  December  15th. 

The  men  interested  decided  to  have  a  National  Bank,  chiefly  because  of  the 
known  conservatism  and  success  of  these  institutions,  which  are  under  the  strict 
supervision  of  the  U.  S.  Government  Officials,  who  keep  in  touch  by  frequent  cer- 
tified reports  of  the  condition  of  the  bank  and  by  personal  examinations  made  by 
the  bank  examiners.  The  National  law  provides  safeguards  for  depositors  and 
stockholders.  Every  stockholder  is  entitled  to  vote  at  the  stockholders'  meetings 
of  the  bank,  and  all  will  be  kept  advised  as  to  the  condition  and  progress  of  their 
institution. 

Bank  stocks  steadily  increase  ill  value,  and  are  in  svich  demand  by  conserva- 
tive investors  that  it  is  generally  impossible  to  obtain  them,  except  by  paying  a 
large  premium,  unless  secured  at  the  time  of  bank  organization,  and  such  oppor- 
tunities are  few. 

Anyone  wishing  to  subscribe  for  shares  should  maks  check  for  the  first  in.stall- 
raent  of  $5  per  share  payable  to  M.  I^.  Knouse,  Treasurer,  and  mail  the  same  to 
ly.  O.  Davis,  Secretary,  McAUisterville,  Pa. 

Further  information  or  application  blanks^  may  be  procured  from  anj'  of 
the  following  named  members  of  the  Organization  Board  : 

J.  A.  Yarkers,  President.  Sylvester  Arnold, 

T.  T.  Davi.s,  Jacob  Bay, 

Henry  Brown,  M.  I,.  Knouse,   Treasurer, 

Wm.  IvAuber,  Christian  Benner, 

John  H.  Shellenberger,        H.  A.  Beyer, 

Wm.  H.  vSieber,  George  Watts. 

lyEO  Shellenberger. 


PUBLIC  BANK  MEETINGS. 


i8®=-  Every  Thursday  Evening  at  eight  (8)  o'clock  there  will  be  held  in  the 
School  House'  at  McAUisterville,  public  meetings  at  which  banking  topics  will 
be  discussed.  All  are  invited  to  attend  and  take  part  in  the  discussions.  A 
special  invitation  is  extended  to  the  ladies. 


BANK  ORGANIZATION.  45 

Minutes  of  the Meeting  of  Organization  Board. 


46  BANK  ORGAN IZATIOX. 


A  NEW  BANK  FOR  KUTZTOWN 

ORGANIZING 


A  number  of  the  Business  Men  and  Farmers  substantially  interested 
in  the  progress  and  welfare  of  Kutztown,  Pa.,  and  vicinity,  have  asso- 
ciated themselves  for  the  purpose  of  organizing  a  second  l;ank,  to  be 
located  va  Kutztown. 

The  reason  for  this  is,  first,  that-^nother  l;ank,  operated  by  business 
men  along  progressive  lines,  will  be  the  means  of  upbuilding  trade  and 
ir^dustry  here  to  the  great  advantage  of  those  who  own  property  or  are 
engaged  in  business  in  this  section.  At  the  same  time  the  organizers 
believe  that  a  second  bank  in  this  community  operated  l^y  leading  busi- 
ness men  and  farmers  on  approved  co-operative  principles,  will  receive 
a  large  patronage,  and,  in  addition  to  paying  the  usual  cash  dividends 
of  prosperous  banks,  there  will  be  an  excess  of  prolits  that  will  each  year 
substantially  increase  the  surplus  and  undivided  profit  fund  of  the  bank. 
This  bank  will  be  controlled  by  carefully  selected  local  men  of  known 
business  ability. 

The  men  interested  have  for  some  time  been  contemplating  this  move 
and  have  met  several  times  to  consider  matters  pertaining  thereto.  They 
have  employed  John  R.  Baer  and  L.  O.  Davis  to  assist  them  in  the  work 
of  placing  the  shares  and  getting  the  bank  fully  organized.  Messrs.  Baer 
and  Davis  were  formerly  in  the  emplo}^  of  the  Manhattan  Trust  Security 
Co.,  of  Philadelphia,  and  assisted  in  organizing  banks  at  Fleetwood,  Bern- 
ville,  Hamburg,  Mohnton  and  Oley,  all  in  Berks  county,  l)esides  assisting 
at  a  number  of  towns  in  adjacent  counties. 

Bank  stocks  steadily  increase  in  value,  and  are  in  such  demand  by 
conservative  investors  that  it  is  generally  impossi])le  to  obtain  them,  ex- 
cept by  paying  a  large  jiremium,  unless  secured  at  the  time  of  bank  or- 
ganization, and  such  opportunities  are  few.  Every  stockholder  is  en- 
titled to  vote  at  the  stockholders'  meetings  of  the  bank,  and  all  will  be 
kept  advised  as  to  the  condition  and  progress  of  the  institution.  Whether 
or  not  the  charter  shall  be  applied  for  under  the  federal  or  state  juris- 
diction will  be  decided  at  a  later  date. 

There  will  be  five  hundred  shares  of  stock  offered  to  the  public. 
Every  share  will  be  sold  at  the  uniform  price  of  $125  each,  of  which  the 
first  instalment  of  $5  a  share  is  payable  with  the  subscription.  The  bal- 
ance will  be  due  as  called  for  by  the  Organization  Board  and  will  prob- 
ably be  payable  as  follows:  $15  April  ist;  $45  May  ist;  $12  June  ist; 
$12  July  1st;  $12  August  ist:  $12  September  ist;  $12  October  ist,  of 
v/hich  subscribers  will  be  duly  notified  by  mail.  The  bank  may  open 
for  business  when  $65  per  share  has  been  paid  in. 

Persons  desiring  to  subscribe  for  shares  will  please  make  check  for 
the  first  i'-stalmcnt  of  $'  a  share  payable  to  order  of  The  First  National 
Bank  of  Fleetwood,  which  has  been  selected  as  the  temporary  depository 
for  the  funds,  and  mail  check  to  L.  O.  Davis,  Secretary,  Box  20,  Kutz- 
town.  Pa. 

For  further  information  see  either  Mr.  Baer  or  Mr.  Davis  at  the 
Keystone  House,  or  any  of  the  following  members  of  the  Organization 
Board : 

CHAS.  W.  MILLER,  T.  F.  ZIMMERMAN, 

JOHN  A.  SCHWOYER,  D.  L.  NICKS, 

DR.  N.  Z.  DUNKELBERGER.  ARTHUR  BONNER. 


BAXK  ORGANIZATIOX.  47 

Minutes  cf  the Meeting  cf  Organization  Beard 


48  BANK  ORGAXIZATIOX. 

THE    CLEARSPRIN^G^    BAIN^K 

GLEARSPRING.   MD. 

HALF  THE  SHARES  DISPOSED  OF 

The  gentlemen  who  have  banded  themselves  together  for  the  purpose  of  or- 
ganizing the  Clearspring  Bank  are  very  highly  gratified  at  the  unusual  progress 
that  is  being  made  in  effecting  the  organization  ;  the  shares  are  rapidly  being  sub- 
scribed for  by  our  best  citizens  and  all  present  indications  more  than  seem  to  show 
that  the  shares  will  be  held  by  a  large  number  of  the  citizens  of  Clearspring  and 
immediate  vicinitj'.  This  method  of  distributing  the  shares  in  small  blocks 
amongst  a  large  number  of  holders  fore.shadows  the  future  success  of  the  bank, 
for  it  is  only  reasonable  to  suppose  that  those  who  purchase  shares  in  the  bank 
will  favor  it  with  their  influence  and  patronage. 

The  Organizers  are  especially  pleased  at  the  progress  being  luade,  because 
they  are  thoroughly  convinced  that  a  local  bank,  operated  by  business  men  along 
progressive  lines,  will  be  the  means  of  upbuilding  trade  and  industry  in  Clear- 
spring  to  the  great  advantage  of  those  who  own  property  or  are  engaged  in  busi- 
ness in  the  town  or  community.  At  the  same  time  they  believe  that  a  bank  in 
Clearspring  operated  by  leading  business  men  and  farmers  on  approved  co-oper- 
ative principles,  will  receive  a  large  patronage,  and  in  addition  to  paying  the 
usual  cash  dividends  of  prosperous  banks,  there  will  be  an  excess  of  profits  that 
will  each  year  substantially  increase  the  surphis  and  undivided  profit  funds  of  the 
bank.  This  bank  will  be  controlled  by  carefully  selected  local  men  of  known 
business  ability 

Bank  stocks  steadily  increase  in  value,  and  are  in  .such  demand  by  conser- 
vative investors  that  it  is  generally  impossible  to  obtain  them,  except  by  paying  a 
large  premium,  unless  secured  at  the  time  of  bank  organization,  and  sucn  oppor- 
tunities are  few.  Kvery  shareholder  is  entitled  to  vote  at  the  shareholders'  meet- 
ings of  the  bank,  and  all  will  be  kept  advised  as  to  the  condition  and  progress  of 
the  institution.  Whether  or  not  the  charter  shall  be  secured  under  the  federal  or 
state  jurisdiction  will  be  decided  at  a  later  date. 

There  will  be  two  hundred  and  fifty  shares  offered  to  the  public.  Every 
share  will  be  sold  at  the  uniform  price  of  5125  each,  of  which  the  first  installment 
of  $5  a  share  is  payable  with  the  subscription.  The  balance  will  be  due  as  called 
for  by  tie  0."ganizaii)n  Board  and  will  probably  be  payable  as  follows:  I13,  Dec. 
15th;  <4o,  Jctn.  15th,  191c;  J13,  Feb.  15th;  $13,  Mar.  15th;"  J13,  April  15th;  $13,  May 
15th;  13,  June  i5'-h. 

The  Hairisburg  National  Bank,  Harrisburg.  Pa.,  has  been  selected  to  act  as 
depositorv  for  the  first  r5  per  share.  In  case  the  Clearspring  Bank  fails  to  orga- 
nize the  a'mount  paid  by  sulxscribers  will  be  returned  to  them  bj'  said  bank. 

Persons  desiring  to  subscribe  will  please  make  check  for  the  first  install- 
ment of  f5  per  share,  payable  to  the  Harrisburg  National  Bank  and  mail  or  hand 
check  to  B'ler  &  Davis,  Clearspring,  Md.,  (Potimac  House,  or  hand  to  any  of  the 
following  interested  persons,  from  whom  further  information  may  be  secured: 

GKO.  T.  PRATHKR  N.   E.  FUNKHOUSER, 

G.  HOWARD  .SMITH,  W.  .S.  CORBETT, 

FRANK  A.  SEIBERT,  DAVID  K.  vSMITH, 

CHARLES  SMITH,  JACOB  ANKFINY, 

HENRY  HEIvSER.  JOS.  A.  SEIBERT, 

DANIEIv  SEIBERT.  W.  W.    SEIBERT, 

JOHN  F.  SOWERS,  DR.  A.  SHANK. 


PUBLIC  BANK  MEETING. 


On  vSaturdaj'  evening  at  7.30  o'clock,  a  public  meeting  will  be  held  in 
the  Odd  Fellows'  Hall,  at  Clearspring,  at  which  meeting  BANKING 
TOPICS  will  be  discas.sed  and  any  information  asked  for  concerning 
banking  will  be  given.  MEETING  OPEN  TO  AI,I^.  A  special  invitation 
is  extended  to  the  ladies. 


BANK  ORGANIZATION.  49 

Minutes  of  the Meeting  of  Organization  Board. 


50  BANK  ORGANIZATION. 


Adv.  No.  4  July  29th 

The   First  National   Bank 

OF  BORDENTOWN,  NEW  JERSEY 

ORGANIZING 


151    SUBSCRIBERS! 

The  Business  Men  and  other  citizens  of  Bordentown  who  are  organ- 
izing the  First  National  Bank  desire  to  express  their  sincere  apprecia- 
tion of  the  splendid  support  and  encouragement  they  have  received.  The 
organization  is  daily  receiving  added  support  from  merchants,  farmers 
and  thrifty  citizens  generally,  who  believe  the  First  National  Bank  will 
be  a  valuable  business  aid  to  the  community,  and  that  its  stock  is  an 
ideal  investment,  both  for  security  and  profit. 

That  the  movement  grows  is  shown  by  the  subscriptions  in  hand  as 
follows:  July  15th,  62  subscriptions;  July  22d,  106,  and  July  29th,  151 
subscriptions.  Of  the  500  shares  allotted  to  Bordentown,  only  a  small 
number  remain  unsold  and  the  250  allotted  to  the  adjoining  territory  are 
being  rapidly  taken  in  small  subscriptions  by  farmers,  merchants  and 
others,  so  that  the  balance  of  the  stock  is  expected  to  be  held  by  about 
200  shareholders,  thus  assuring  the  popularity  and  support  of  the  National 
Bank  after  it  opens  for  business  about  the  middle  of  October. 

Those  desiring  to  secure  shares  should  do  so  at  once.  This  will  be 
a  home  Bank,  owned,  directed  and  officered  by  home  people.  No  person 
may  subscribe  for  more  than  10  shares,  and  every  stockholder  is  entitled 
to  vote  at  meetings  of  the  stockholders. 

Every  share  is  issued  and  sold  at  the  uniform  price  of  $125,  and  is 
payable  $5  a  share  with  subscription  for  the  July  payment  and  sub- 
scribers will  be  notified  by  mail  in  due  time  afterwards  of  the  remaining 
payments  as  follows:  August  15th,  $10;  September  15th,  $10;  October 
15th,  $^0;  November  15th,  $12;  December  15th,  $12;  January  15th,  $12; 
February  15th,  $12,  and  March   15th,  $12. 

Persons  desiring  to  subscribe  will  please  make  check  for  the  first 
instalment  for  $5  a  share  payable  to  "  First  National  Bank  of  Trenton," 
the  temporary  depository  for  funds,  and  they  may  leave  same  at  the  tem- 
porary office  in  the  W.  C.  T.  U.  library  room  over  Beatty's  grocery.  In- 
formation will  1)e  cheerfully  furnished  at  the  office,  or  by  any  of  the  un- 
dersigned subscribers : 

Frederick  J.  Potter,  George  L.  Robbins,  Joseph  L.  Osmond. 

James  Tantum,  John  Kenner.  James  S.  Gilbert,  M.  D., 

Samuee  E.  Burr,  Harrison  G.  Wright,  Jacob  Holzbaur, 

David  R.  Brown,  Wm.   McK.  Morris,  Samuel  Robinson, 

William  Warrack,  Charles  E.  Burr,  A.   M.   Parker, 

George  F.  Deacon,  Walter  Fosbrook,  S.   F.   Garrison, 

Frank  K.  Holloway,  William  E.  Warner,  Joseph  R.  Deacon, 

Joshua  Emory,  Frank  T.  Buchanan,  And  Others. 

Or,  address  Secretary  of  Organization  Board.  P.  O.  Box  383,  Bor- 
dentown, N.  J.  Interstate  'phone,  120.  Subscriptions  received  at  office, 
or  by  solicitor,  L.  O.  Davis. 


BAxVK  ORGANIZATION.  51 

Minutes  of  the  Meeting  of  Organization  Board. 


52  •  BANK  ORGANIZATION. 

PRICE  OF  STOCK. 

The  law  requires  that  the  Capital  Stock  of  a  National  Bank 
shall  be  paid  in  cash  at  par  ($ioo),  but  the  Organization  Board 
has  a  perfect  right  to  ask  that  a  premium  be  paid  for  the  stock. 
The  writer  always  prefers  his  Board  to  ask  at  least  $125.00  per 
share,  $100.00  being  the  par  value  of  the  stock  of  all  National 
Banks  and  the  $25.00  is  credited  to  the  Undivided  Profit  Fund 
and  after  the  expenses  of  organizing  are  deducted,  the  balance 
is  placed  in  the  Surplus  Fund,  for  if  the  bank  starts  with  a  sur- 
plus of  25%,  then  at  first  distribution  of  dividends  the  net  earn- 
ings can  all  be  distributed,  if  it  is  so  desired,  and  while  this  would 
not  be  considered  good  banking,  yet  the  writer  has  seen  condi- 
tions when  it  paid  the  bank  very  well  to  do  so. 

HOW  PAYMENTS  ARE  TO  BE  MADE. 

The  usual  custom  is  to  allow  stock  to  be  paid  for  in  instal- 
ments, although  it  is  an  open  question  whether  the  law  makes 
same  compulsory,  yet  the  instalment  plan  is  the  best  plan,  for  it 
will  allow  you  to  secure  a  larger  number  of  subscribers  for  your 
stock.  It  is  nothing  unusual  for  the  writer's  solicitors  to  se- 
cure from  75  to  200  subscribers  for  a  $25,000  or  $50,000  bank. 

When  subscriptions  to  stock  are  paid  for  in  instalments, 
"  Temporary  Certificates  ought  to  be  issued,  and  the  amount  of 
payments  credited  thereon  upon  full  payments  having  been  made 
and  the  surrender  of  the  Temporary  Certificates,  the  permanent 
"  Certificates  of  Stock  "  are  to  be  issued. 


BANK  OROAXIZATIOX.  52a 


PRICE  OF  STOCK. 


The  present  Comptroller,  ]\Ir.  L.  O.  Murray,  who  is  watch- 
m^  the  Xati<jnal  iJanks  closer  than  any  previous  official  has  ever 
(l(jne,  and  who  is  (U)ing-  all  that  is  in  his  power  to  strengthen  the 
hanks  through(nit  the  entire  country,  is  now  advocating  some- 
thing that  the  writer  has  been  trying  to  accomplish  for  some  years, 
as  explained  in  this  article,  which  appeared  in  the  "  Philadelphia 
Record."  issue  of  September  17,  1910: 

AIM  TO  MAKE  liAXKS  SAFER. 
\i:\\   Kkc.islation  Plannicd  to  RiiIduci^  Ciiancks  ol<  Failures. 

Impcn-tant  changes  in  the  national  bank  law  may  be  pro- 
posed to  the  next  Congress,  one  of  them  being  to  com])el  newly- 
organized  national  banks  to  provide  a  surplus  and  an  absolutely 
unimpaired  cai)ital  the  day  they  begin  business.  Under  the 
present  system  a  national  bank  with  a  paid-in  capital  of  $25,000 
will  spend  probably  $5000  at  the  start  for  fixtures,  books  and 
other  necessities,  thus  impairing  its  capital.  In  some  cases  it 
has  been  twc*  years  before  the  bank  earned  enough  to  wipe  out 
that  amount  and  have  its  capital  stock  unimpaired.  Even  then 
it  had  no  surplus. 

The  idea  is  to  compel  the  organizers  of  a  bank  to  provide 
a  20  i)er  cent,  surj^lus  at  the  start.  It  is  understood  that  such 
a  plan  will  be  urged  upon  banks  now  forming,  and  that  others 
will  be  urged  to  discontinue  dividends  until  their  surplus  is  ac- 
cumulated. 

There  is  also  .some  talk  of  trying  to  increase  the  efficiency 
of  national  bank  examiners  by  asking  Congress  to  create  places 
for  supervisory  examiners  who  can  superintendent  the  work  of 
the  men  in  the  field. 

( )ther  plans  for  the  better  regulation  of  national  banks,  all 
intended  to  reduce  the  possibilities  of  failures,  are  being  con- 
sidered and  probably  will  find  their  way  to  Congress  through 
the  Monetary  Commission  or  officials  of  the  Treasury  Depart- 
ment. 


BANK  ORGANIZATION.  53 

Minutes  of  the Meeting  of  Organization  Board. 


54 


BANK  ORGANIZATION. 

THE  AUTHOR'S  FORM  OF  TEMPORARY  CERTIFICATES. 


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56  BANK  ORGANIZATION. 

FORMING  PERMANENT  BOARD  OF  DIRECTORS. 

After  the  stock  has  all  been  sold,  you  will  be  ready  to  call  a 
meeting  of  your  Organization  Board,  and  after  having  gone 
over,  apportioned  and  accepted  your  stock  list,  a  motion  to  dis- 
band will  be  next  in  order,  and  the  author  uses  the  following 
order  in  winding  up  the  Organization  Board : 

''  Mr.  Chairman, 

I  move  you  Sir,  that  we  appoint  Messrs '. 

(naming  all  the  members  of  the  Board  who  are  to  serve  as  Direc- 
tors) to  serve  as  ''  Directors  of  the National  Bank 

of  "  for  the  ensuing  year,  and  until  their  succes- 
sors have  been  elected  and  duly  qualified,  and  that  we  turn  over 
to  these  gentlemen  all  unfinished  business  and  unfulfilled  obli- 
gations assumed  by  this  Board/' 

This  motion  being  properly  carried,  a  second  and  last  motion 
is  in  order. 

''  Mr.  Chairman, 

I  move  you  Sir,  that  this  Organization  Board,  having  ful- 
filled the  object  for  which  it  was  formed,  we  now  disband." 

Upon  this  motion  being  carried,  the  Chairman  declares  the 
Organization  Board  disbanded. 

You  are  now  ready  to  fill  in  your  "  Organization  Papers," 
and  a  full  set  is  included  in  these  papers  zvith  full  instructions, 
and  if  you  follow  the  "  Letter  of  Instructions"  which  accom- 
panied the  papers,  you  will  have  no  difficulty  in  properly  filling 
them  out. 

Note. — Appointing  the  Directors  in  the  above  manner  is,  of  course, 
subject  to  the  consent  of  the  majority  of  the  stockholders,  and  the  stock- 
holders still  have  the  power  to  protest  against  the  Board  as  appointed  and 
elect  their  own  board,  but  usually  when  appointed  as  above  the  Board 
stands  by  the  passive  acquiescence  of  the  stockholders. 


BANK  ORGANIZATION.  57 

Minutes  of  the Meeting  of  Organization  Board. 


58  ■  BANK  ORGANIZATION. 


THE    COMPTROLLER'S    LETTER    OF    INSTRUCTIONS 
AS  TO  HOW  TO  FILL  IN  ORGANIZATION  PAPERS. 


Trkasury  Department,  Office  of  the  Comptroleer  of  the 

Currency. 

Oct.  — ,  19—. 

Mr.  Jno.  R.  Baer, 

No.  2915  N.  Park  Ave., 
Philadelphia,  Pa. 
Sir: 

The   application   signed   by    and   others,    dated 

Sept.  II, ,  for  authority  to  organize  "  The " 

to  be  located  at   ,  with  capital  stock  of  $ , 

meets  with  approval. 

The  title  selected  will  be  reserved  for  a  period  of  sixty  days 
to  enable  the  persons  interested  to  effect  the  organization  of 
the  bank,  the- required  blanks  for  which  purpose  are  inclosed. 

By  carefully  observing  the  following  instructions  and  the 
explanatory  notes  on  the  blanks,  in  executing  the  latter,  delay 
in  establishing  the  bank  will  be  avoided : 

ARTICLES   OF   ASSOCIATION. 

Section  i. — Insert  the  title  of  the  bank  as  approz'ed. 

Sec.  2. — Insert  name  of  the  village,  town,  or  city,  and  that  of  the  State. 

Sec.  3. — Instead  of  specifying  that  the  Board  of  Directors  shall  con- 
sist of  a  definite  number  of  shareholders,  this  section  may  provide :  "  The 
Board  of  Directors  shall  consist  of  not  less  than  (here  insert  minimum 
number  of  directors)  nor  more  than  (here  insert  maximum  number  of 
directors)  shareholders."  If  Directors  are  appointed,  the  last  four  lines 
of  this  section  with  regard  to  holding  a  meeting  of  shareholders  for  the 
election  of  Directors  should  be  crossed  off  and  the  names  of  the  Direc- 
tors inserted,  adding  the  following  clause :  "  Are  hereby  appointed  Direc- 
tors of  this  association  to  hold  their  offices  as  such  until  the  regular 
annual  election  takes  place,  pursuant  to  the  4th  article  of  these  articles 
of  association. 

Sec.  4. — Insert  amount  of  authorized  capital  stock.  There  should  ap- 
pear on  page  2  of  the  articles  the  signatures  of  at  least  five  persons,  a 
majority  of  whom  signed  the  application  for  authority  to  organize  the 
bank. 


BANK  ORGANIZATION.  59 

Minutes  of  the Meeting  of  Organization  Board. 


6o  BANK  ORGANIZATION. 

ORGANIZATION    CERTIFICATE. 

Section  i. — Insert  the  title  of  the  bank  as  approved. 

Sec.  2. — In  specifying  name  of  place,  indicate  whether  "  village," 
■"  town,"  or  "  city,"  and  also  give  names  of  county  and  State. 

Sec.  3. — In  addition  to  entering  amount  of  capital,  give  the  number 
of  shares  into  which  it  is  divided. 

Sec.  4. — Insert  names  of  shareholders,  residences  (town  or  city  and 
State),  and  number  of  shares  held  by  each  for  which  certihcates  are  to 
bie  issued  to  said  shareholders  when  the  bank  is  chartered  and  the  stock 
has  been  paid  for,  as  required  by  section  5140  of  the  United  States  Re- 
vised Statutes,  transfers  to  be  made  in  the  regular  manner  in  the  case 
of  any  stock  which  changes  ownership. 

There  should  appear  on  page  3  of  the  organization  certificate  the 
signatures  of  the  persons  who  signed  on  page  2  of  the  articles.  Acknowl- 
<!dgement  must  be  made  before  a  judge  of  court  or  notary  public. 

OATHS    OF     directors. 

Be  particular  to  insert  title  of  bank,  location,  name  of  State  in  which 
the  Director  resides,  place  of  residence  after  signature  of  Director,  and 
have  the  paper  executed  before  an  officer  having  a  seal,  if  possible.  In 
case  the  officer  administering  the  oath  has  no  seal,  a  certificate  of  the 
proper  State,  county,  or  court  official  to  the  effect  that  such  officer  is 
authorized  to  take  acknowledgments  must  be  attached.  When  the  Direc- 
tors qualify  jointly,  it  is  unnecessary  for  each  to  make  an  individual  oath. 

Under  section  5146  of  the  United  States  Revised  Statutes  as  amended 
February  28,  1905,  every  Director  must  own  in  his  own  right  at  least  10 
shares  of  capital  stock  of  the  association,  unless  the  capital  shall  not  ex- 
<:eed  $25,000,  in  which  case  he  must  own  in  his  own  right  at  least  5  shares. 

SIGNATURES    OE   OFFICERS. 

The  signatures  of  all  officers  should  be  given,  together  with  the  date 
of  the  meeting  of  the  Board  of  Directors  at  which  the  appointments  were 
made. 

Officers  can  not  be  appointed  until  the  Directors  qualify  as  required 
by  law. 

While  it  is  desirable  that  the  seal  of  the  bank  be  affixed,  the  paper 
need  not  be  withheld  for  that  purpose,  if  such  action  will  materially  delay 
organization.  Forwarding  with  without  seal  will  necessitate  the  resub— 
mission  of  the  signatures,  under  seal,  after  charter  is  issued. 

CERTIFICATE    OF    OFFICERS    AND    DIRECTORS    RELATIVE    TO    PAYMENT    OF    CAPITAL 
STOCK,    AND    COMPLIANCE    WITH    OTHER    LEGAL    REQUIREMENTS. 

Insert  the  exact  title  of  the  bank  and  place  of  location,  togerther  with 
the  r  mount  of  the  authorized  capital  stock  and  the  first  instalment  paid 
in,  not  less  than  50%  ;  give  the  name,  place  of  residence  (town  or  city  and 


BANK    ORGANIZATION.  6r 

Minutes  of  the Meeting  of  Organization  Board, 


62  BANK  ORGANIZATION. 

State),  and  number  of  shares  of  stock  of  each  Director,  which  must  cor- 
respond with  the  number  listed  in  the  organization  certificate.  (Directors 
must  not  sign  their  own  names  on  page  i.) 

There  should  be  given  on  page  2  the  signatures  of  a  majority  of  the 
Directors,  and  the  president  or  cashier,  all  of  whom  are  required  to  make 
proper  acknowledgment.  This  certificate  should  not  be  executed  until 
the  Directors  have  taken  the  oath  above  referred  to,  as  required  by  sec- 
tion 5147,  United  States  Revised  Statutes.  (Directors  must  affix  their 
own  signatures  on  page  2.) 

The  bank  does  not  become  a  body  corporate  until  the  execu- 
tion of  the  articles  of  association  and  organization  certificate; 
and,  as  the  date  of  the  last  acknowledgment  of  the  latter  deter- 
mines the  time  when  the  corporate  existence  begins,  all  other 
documents — oaths  of  directors,  signatures  of  ofificers,  certificate 
of  payment  of  capital  stock,  etc. — must  necessarily  bear  that 
date  or  one  subsequent  thereto. 

In  the  event  that  the  business  of  any  other  bank  is  to  be  ac- 
quired, a  statement  should  be  forwarded  on  the  blank  inclosed 
for  that  purpose,  signed  by  at  least  a  majority  of  the  directors, 
to  the  effect  that  any  assets  which  may  be  purchased,  or  other- 
Avise  acquired,  will  not  include  real  estate  except  banking  prem- 
ises, stocks,  loans  secured  by  real  estate,  nor  any  loan  in  excess 
of  10%  of  the  capital  stock  of  the  National  bank  actually  paid 
in  and  unimpaired  and  10%  of  the  unimpaired  surplus  fund,  the 
total  not  to  exceed  30%  of  the  capital  stock. 

Upon  the  return  of  the  inclosures  properly  executed  and  the 
deposit  of  the  required  amount  of  United  States  bonds  as  se- 
curity for  circulation,  the  certificate  authorizing  the  bank  to  be- 
gin business  will  be  promptly  issued,  provided  all  legal  require- 
ments are  found  to  have  been  satisfied.  The  Comptroller  should 
he  advised  of  the  name  and  address  of  the  officer  or  other  person 
to  zi'hom  the  certificate  is  to  be  mailed.  The  bank  may  begin 
business  on  receipt  of  telegraphic  advice  of  the  issuance  of 
charter. 

As  it  is  desirable  to  have  the  charter  number  of  the  bank 
upon  its  letter  head,  it  is  suggested  that  the  ordering  of  per- 
manent stationery  be  deferred  until  receipt  of  the  telegram  or 
charter. 

Respectfully, 

Wm.  B.  Ridgely, 
Iocs.  Comptroller. 


BANK  ORGANIZATION.  65 

Minutes  of  the Meeting  cf  Organization  Board. 


64  BANK  ORGANIZATION. 

PROPER  OFFICIALS   TO  '  ADMINISTER   "  OATHS    OF 
OFFICE  AND  TO  RECEIVE  ACKNOWLEDGMENTS." 

There  is  always  so  much  uncertainty  as  to  the  proper  official 
to  administer  the  "  Oath  of  Office,"  receive  acknowledgments, 
and  to  execute  the  organization  papers  that  the  author  deems 
it  expedient  to  deal  with  the  subject  in  detail. 

I. — Articles  of  Association — No  acknowledgment  necessary. 

2. — Organization  Certificate — Notary  Public,  Judge  of  Court. 
(Section  5134  R.  S.) 

3. — Oaths  of  Directors — While  being  sworn  into  office — 
Notary  Public,  Justice  of  the  Peace,  Judge  of  Court.  (Section 
5147  R.  S.) 

4. — Oaths  of  Directors — Relative  to  payment  of  Capital  Stock 
— Justice  ofthe  Peace,  Notary  Public,  Judge  of  Court.  (5168 
R.  S.) 

5. — After  Organization — All  acknowledgments  must  be  made 
before  a  Notary  Public. 

NOTARY  PUBLIC. 

Can  a  Notary  Public  be  an  officer  in  a  National  bank  and 
act  as  its  Notary  ?  Yes ;  but  he  can  not  receive  his  ow^n  acknowl- 
edgment nor  that  of  the  president  and  cashier  relative  to  the 
condition,  earnings  and  dividends  of  the  bank,  i.  e.,  if  he  is  a 
director,  cashier,  teller,  or  bookkeeper. —  (521 1-52 12  R.  S.) 

Can  a  Notary  Public  protest  paper  if  he  owns  shares  in  the 
bank?    Yes.— U.  S.  C.  C.  of  A. 

Can  a  Notary  Public  own  shares  in  a  bank  and  act  as  Notary, 
swearing  in  the  directors,  receive  their  acknowledgments  and 
fill  out  organization  papers  ?    Yes. 


BANK  ORGANIZATION.  65 


ORGANIZATION  PAPERS. 

(To  be  executed  in  consecutive  order.) 


1 .  Articles  of  Association. 

2.  Organization  Certificate. 

3.  Oaths  of  Directors. 

4.  Certificate  as  to  Payments  on  Capital  Stock, 

5.  Order  for  Circulation. 

6.  Signatures  of  Officers. 


66  BANK  ORGANIZATION. 

ARTICLES  OF  ASSOCIATION 

(Executed  in  duplicate) 


[Always  fill  ont  this  paper  first.] 

For  the  purpose  of  organizing  an  Association  to  carry  on  the  business  of 
banking,  under  the  laws  of  the  United  States,  the  undersigned  subscri- 
bers for  the  stock  of  the  Association  hereinafter  named  do  enter  into 
the  following  Articles  of  Association  : 

First. — The  title  of  this  Association  shall  be  "  The 


Second.^Th^  place  where  its  banking  house  or  office  shall 
be  located,  and  its  operations  of  discount  and  deposit  carried  on, 
and  its  general  business  conducted,  shall  be 


Third. — The  Board  of  Directors  shall  consist  of 
shareholders.       


(See  foot-note  concerning  appointing  Directors.) 


The  first  meeting  of  the  shareholders  for  the  election  of  Direc- 
tors shall  be  held  at 

on  the    ,  or  at  such   other 

place  and  time  as  the  majority  of  the  undersigned  shareholders 
may  direct. 

Fourth. — The  regular  annual  meetings  of  the  shareholders 
for  the  election  of  Directors  shall  be  held  at  the  banking  house 
of  this  Association  on  the  second  Tuesday  of  January  of  each 
year ;  but  if  no  election  shall  be  held  on  that  day,  it  may  be  held 
on  any  other  day  according  to  the  provisions  of  section  5149  of 
the  Revised  Statutes  of  the  United  States,  and  all  elections  shall 
be  held  according  to  such  regulations  as  may  be  prescribed  by 
the  Board  of  Directors,  not  inconsistent  with  the  provisions  of 
the  National  Banking  Law,  and  of  these  articles. 

Fifth. — The  capital  stock  of  this  Association  shall  be  $ 

dollars, 

divided  into  shares  of  one  hundred  dollars  each;  but  the  capital 
may,  with  the  approval  of  the  Comptroller  of  'the  Currency,  be 


BANK  ORGANIZATION.  gy 

Minutes  of  the Meeting  of  Organization  Board. 


68  BANK  ORGANIZATION. 

increased  at  any  time  by  shareholders  owning  two-thirds  of  the 
stock,  according  to  the  provisions  of  an  act  of  Congress  ap- 
proved May  I,  1886;  and  in  case  of  the  increase  of  the  capital 
of  the  Association,  each  shareholder  shall  have  the  privilege  of 
subscribing  for  such  number  of  shares  of  the  proposed  increase 
of  the  capital  stock  as  he  may  be  entitled  to  according  to  tlie  num- 
ber of  shares  owned  by  him  before  the  stock  is  increased. 

Sixth. — The  Board  of  Directors,  a  majority  of  whom  shall 
be  a  quorum  to  do  business,  shall  elect  one  of  its  members  Presi- 
dent of  this  Association,  who  shall  hold  his  office  (unless  he  shall 
be  disqualified,  or  be  sooner  removed  by  a  two-thirds  vote  of  all 
the  members  of  the  Board)  for  the  term  for  which  he  was  elected 
a  Director.  Directors  shall  have  power  to  elect  a  Vice-President, 
who  shall  also  be  a  member  of  the  Board  of  Directors,  and  who 
shall  be  authorized,  in  the  absence  or  inability  of  the  President 
from  any  cause,  to  perform  all  acts  and  duties  pertaining  to  the 
office  of  President  except 'such  as  the  President  only  is  author- 
ized by  law  to  perform,  and  to  elect  or  appoint  a  Cashier,  and 
such  other  officers  and  clerks  as  may  be  required  to  transact  the 
business  of  the  Association ;  to  fix  the  salaries  to  be  paid  to  them, 
and  continue  them  in  office,  or  to  dismiss  them  as,  in  the  opinion 
of  a  majority  of  the  Board,  the  interests  of  the  Association  may 
demand. 

The  Directors  shall  have  power  to  define  the  duties  of  the  of- 
fi(5ers  and  clerks  of  the  Association,  to  require  bonds  from  them, 
and  to  fix  the  penalty  thereof;  to  regulate  the  manner  in  which 
elections  of  Directors  shall  be  held,  and  to  appoint  judges  of  the 
election;  to  make  all  by-laws  that  it  may  be  proper  for  them  to 
make,  not  inconsistent  with  the  law,  for  the  general  regulation  of 
the  business  of  the  Association  and  the  management  of  its  affairs 
and  generally  to  do  and  perform  all  acts  that.it  may  be  legal  for 
a  Board  of  Directors  to  do  and  perform  under  the  Revised  Sta- 
tutes aforesaid. 

Seventh. — This  Association  shall  continue  for  the  period  of 
twenty  years  from  the  date  of  the  execution  of  its  Organization 
Certificate  unless  sooner  placed  in  voluntary  liquidation  by  the 
act  of  its  shareholders  owning  at  least  two-thirds  of  its  stock, 
or  otherwise  dissolved  by  authority  of  law. 

Eighth. — These  Articles  of  Association  may  be  changed  or 
amended  at  any  time  by  shareholders  owning  a  majority  of  the 


BANK  ORGANIZATION.  69 

Minutes  of  the Meeting  of  Organization  Board. 


70 


BANK  ORGANIZATION. 


stock  of  the  Association,  in  any  manner  not  inconsistent  with 
law ;  and  the  Board  of  Directors,  or  any  three  shareliolders,  may 
call  a  meeting  for  this  or  any  other  purpose,  not  inconsistent  with 
law,  by  pubHshing  notice  thereof  for  thirty  days  in  a  newspaper 
published  in  the  town,  city,  or  county  where  the  Bank  is  located, 
or  by  mailing  to  each  shareholder  notice  in  writing  thirty  days 
before  the  time  affixed  for  the  meeting. 


IN  WITNESS  WHEREOF,  we  h^ve  hereunto  set  our  hands, 
this    day   of    19 ... . 

(To  be  signed  by  at  least  five  natural  persons,  prefe.  ably  the  applicants.) 


I 

14 

2 

J.s 

-^ 

16 

4 

17 

5 

18 

6 

19 

^ 

20 

8 

21 

^ 

22 

10 

2\ 

II 

24 

12 

2.S 

i.^ 

26 

Have  all  those  who  signed  the  Application  for  permission 
to  organize  sign  here  (full  name— no  initials).  If  you  can  not 
get  the  original  five,  get  your  five  strongest  men  to  sign,  includ- 
ing as  man}-  of  the  original  five  as  possible. 


BANK  ORGANIZATION.  "       71 

Minutes  of  the Meeting  of  Organization  Board. 


72       *  BANK  ORGANIZATION. 

Instead  of  providing,  in  section  three  of  the  Articles  of  As- 
sociation, for  the  election  of  the  first  Board  of  Directors,  the 
names  of  the  Directors  may  be  given  therein  if  the  stockholders 
are  agreed  as  to  the  persons  who  are  to  constitute  the  Board. 
In  this  event  the  third  article  should  read  as  follows : 

The  board  of  directors  shall  consist  of  shareholders,  and  the 

following  persons  (here  insert  their  names)  are  hereby  appointed  direc- 
tors of  this  association,  to  hold  their  offices  as  such  until  the  regular 
annual  election  takes  place,  pursuant  to  the  fourth  article  of  these  arti- 
cles of  association,  and  until  their  successors  are  chosen  and  have  quali- 
fied. 

The  third  section,  if  desired,  may  be  made  to  provide  for 
what  is  termed  a  sliding  scale  instead  of  a  fixed  number  of  Direc- 
tors ;  in  other  words,  a  minimum  and  maximum  number  of 
Directors,  in  which  event  the  section  should  read  as  follows : 

The  board  of  directors  shall  consist  of  not  less  than  (insert  mini- 
mum number)  nor  more  than  (insert  maximum  number)  shareholders; 
and  the  following  persons  (here  insert  their  names)  are  hereby  appoint- 
ed directors  of  this  association,  to  hold  their  offices  as  such  until  the 
regular  annual  election  takes  place,  pursuant  to  the  fourth  article  of 
these  articles  of  association,  and  until  their  successors  are  chosen  and 
have  qualified.  The  number  of  directors  elected  at  each  annual  meeting 
shall  constitute  the  board  for  the  year,  all  vacancies  to  be  filled  as  in 
the  other  case  in  accordance  with  the  provisions  of  section  5148. 


BANK  ORGANIZATION.  73 

Minutes  cf  the Meeting  of  Organization  Beard. 


74 


BANK  ORGANIZATION. 

ORGANIZATION  CERTIFICATE. 

(Executed  in  duplicate.) 


JVe,  the  undersigned,  whose  names  are  specified  in  article  fourth  of  this 
Certificate,  having  associated  ourselves  for  the  purpose  of  organizing  an 
Association  for  carrying  on  the  business  of  banking,  under  the  laius  of  the 
United  States,  do  inake  and  execute  the  following  Organization  Certificate  : 

First.     The  title  of  the  Association  shall  be  "  The. 


Second.     The  said  Association  shall  be  located  in  the 

of_ _ ,  County  of and  State  of 

,  where  its  operations  of  discount  and  deposit  arc  to  be 

carried  on. 

Third.     The  Capital  Stock  of  this  Association  shall  be  $ 

dollars, 

and  shall  be  divided  into shares  cf  one  hundred  dollars 

each. 

Fourth.  The  name  and  the  residence  of  each  Shareholder  of  this  Asso- 
ciation, zvith  the  number  of  shares  held,  are  as  follows  : 


NAME 

RESIDKNCR 

No.  of  vShares 

I 

. 

2 

3 

4 

5 

6 

7 

8 

9 

lO 

11 

12 

13 

BANK  ORGANIZATION.  75 

Minutes  of  the Meeting  of  Organization  Board. 


76 


BANK  ORGANIZATION. 


Fifth.  This  Certificate  is  made  in  order  that  we  may  avail  ourselves  of 
the  advantages  of  the  aforesaid  laius  of  the  United  States. 

In  witness  zahereof,  we  have  hereunto  set  our  hands,  this 

day  of_ ,  ig 

(To  be  signed  and  acknowledged  by  those  who  have  signed  the  Articles  of  Association.) 


. 

2 

3 

4 

5 

6 

7 

8 

9 

lO 

11 

12 

13 

14 

15 

i6 

17 

i8 

19 

20 

BANK   ORGANIZATION.  77 

Minutes  of  the Meeting  of  Organization  Board. 


78  BANK  ORGANIZATION. 

(Acknowledgement  must  be  made  before  Judge  of  Court  or  Notary  Public.) 

State  of ) 

County  of j 


Be/ore  the  undersigned,  a_ 


of_ personally  appeared^ 


to  me  well  known,  who  severally  acknowledged  that  they  executed  the  fore- 
going Certificate  for  the  purposes  therein  mentioned. 


OFFICIAL  SEAL 

OF 

OFFICER. 


Witness  my  hand  a7id  seal  of  office  this 
day  of ,  /p 


BANK  ORGANIZATION.  79 

Minutes  of  the Meeting  of  Organization  Board. 


8o 


BANK  ORGANIZATION. 


OATH  OF  DIRECTORS 

(Sect.  5147,  U.  S.  R.  S.) 


W^,  tl|p  unbrratgnr^  StrwtnrH  of  T/ie 

,  located  at 

being  citizens  of  the  United  States^  and  residejits 

of  the  State  {or  Territory)  of. , 

do^  each  for  himself,  and  not  one  for  the  other,  solemnly  swear  that 
we  will  severally,  so  far  as  the  duty  devolves  on  us,  diligently  and 
honestly  administer  the  affairs  of  said  Association;  and  that  we  will 
not  knowingly  violate,  or  willingly  permit  to  be  violated,  any  of  the 
provisioJis  of  the  Statutes  of  the  United  States  under  ivhich  said  As- 
sociation has  been  organized,  and,  each  for  himself,  does  solemnly 
swear  that  he  is  the  owner  in  good  faith,  and  in  his  own  right,  of 
the  number  of  shares  of  stock  required  by  said  statutes,  subscribed  by 
him  or  standing  in  his  nameon  the  books  of  the  said  Association  ; 
and  that  the  same  is  not  hypothecated,  or  in  any  way  pledged  as  se- 
curity for  any  loan  or  debt. 

(Be  sure  and  sign  your  name  in  full  :  John  j.  Henry,  not  J.  J.  Henry.) 


SIGNATURE. 

SIGNATURE. 

, 

5 

2 

6 

3 

7 

4 

8 

ss 


State  of 

County  of J 

Subscribed  afid  swor7i  to  this 

day  of. ,  ig 

before   the  undersigned,  a   Notary  Public  in 

aadfor  said  county. 


OFFICIAL  SEAL 

OF 

OFFICER 


Notary  Public. 

Also  Justice  of  the  Peace  or  Judge  of  Court  of  Record  can  administer  this  oath. 

Note. — Each  director  when  elected  must  take  oath  of  office,  under 
section  5147,  U.  S.  R.  S.,  the  oath  should  be  trasmitted  to  the  Comptroller 
of  the  Currency  immediately  after  the  election.  If  the  officer  administering 
the  oath  has  no  seal,  a  certificate  of  the  proper  State,  county,  or  court 
official  to  the  efifect  that  such  officer  is  authorized  to  take  acknowledge- 
ments must  be  attached. 


BANK  ORGANIZATION.  8i 

Minutes  of  the Meeting  of  Organization  Board 


82  BANK  ORGANIZATION. 

(To  be  filled  in  after  Directors  have  assumed  oath  of  office  and  elected  their  officers.) 

(l^Krtal  B>t0n3tur?S  of  the  President,    Vice-President,   Cashier, 

and  Assistant  Cashier  of  The 

located  at  ^ 

,    appointed 

at  a  meeting  of  the  Board  of  Directors  held  on  the  

day  of. ,  ig 

[Original  signatures  necessary.] 


President. 
.  Vice  President. 
.  Vice-President. 
Vice-President. 
.Cashier. 

A  ssista  n  t  Cash  it  r. 
Assistant  Cashier, 


SEAL 

OF 
BANK 


IMPORTANT. 

The  signatures  of  officers  should  be  forwarded,  although  no  change 
may  have  taken  place,  and  this  paper  will  be  returned  for  correction  unless 
these  directions  are  followed:  (i)  The  signatures  of  the  Vice-President 
and  Assistant  Cashier  must  be  given,  if  you  have  such  officers,  in  addi- 
tion to  those  of  the  President  and  Cashier.  (2)  Write  the  word  "none" 
where  the  office  is  vacant.  (3.)  Affix  the  seal  of  the  bank  in  the  place 
designated.  (4)  Insert  the  title  of  the  bank,  and  be  careful  to  give 
date  of  appointment  of  officers.  (5)  Properly  brief  and  promptly  for- 
ward this  paper  to  the  Comptroller  of  the  Currency. 

If  you  do  not  have  your  seal  when  you  organize,  etc.,  see 
"  Letter  of  Instruction  "  received  from  the  Government  with  the 
organization  papers. 


BANK  ORGANIZATION.  83 

Minutes  of  the  Meeting  of  Organization  Board. 


84-,  *  BANK  ORGANIZATION. 


CERTIFICATE  RELATIVE  TO  PAYMENT  OF  50%  OF 
CAPITAL  STOCK. 

5168  R.  S. 

This  certificate  must  be  filled  out  and  affirmed  before  a 
Justice  of  the  Peace,  Notary  Public  or  Judge  of  Court. 

The  ruling's  of  prior  Comptrollers  had  been  that  this  paper 
should  be  filled  out  and  sent  in  just  as  soon  as  50%  of  the  cap- 
ital stock  of  the  bank  had  been  collected,  irrespective  of  what 
stockholders  had  paid  in  the  same,  taking  the  clause  to  mean 
50%  in  the  agi^regate.  The  present  Comptroller,  however,  rules 
it  to  mean  50%  on  each  share,  so  you  must  collect  that  amount 
on  each  share  before  you  can  send  in  this  paper.  This  ruling  is 
a  decided  disadvantage  to  any  bank  being  organized  under  this 
ruling,  as  there  are  always  good,  reliable  men  in  each  community 
who,  because  of  other  affiliations,  can  not  or  will  not  take  a  hold 
during  the  organization  period,  and  in  order  to  hold  shares  of 
stock  for  such  very  desirable  parties,  the  Directors  are  compelled 
either  to  purchase  enough  shares  outright,  or  as  private  individuals 
borrow  enough  money  to  carry  those  shares — and  in  a  number 
of  cases  the  writer  has  known  where  a  P>oard  of  Directors  not 
being  willing  to  do  this,  were  unable  to  secure  shares  to  draw  in 
some  of  the  best  men  in  their  towns,  thereby  losing  their  patron- 
age. The  writer  was  on  a  street  car  with  one  of  the  Directors 
of  a  bank  that  had  lately  been  organized  in  a  town  close  by, 
when  the  Director  spied  a  prominent  manufacturer  of  his  town 
who  had  as  yet  refused  to  affiliate  himself  with  the  new  bank. 
Mr.  Director  tackled  him  and  Mr.  Manufacturer  replied :  "Yes, 
if  you  had  given  me  some  shares  in  your  bank  I  would  have  at 

least  kept  my  contingent  fund  there ;  as  it  is  the  bank  in 

is  good  enough  for  me."  The  reply  was  "Hold  on,  we  reserved 
five  shares  for  you  that  you  can  have  any  time  that  you  are  ready 
for  them."  Result:  Mr.  Manufacturer  is  now  carrying  not  only 
his  contingent  fund  but  his  entire  account  at  that  bank  and  is 
slated  for  a  Directorship,  a  clear  gain  of  thousands  of  dollars  a 
year  caught  by  a  reserve  of  five  shares. 


BANK  ORGANIZATION.  85 

Minutes  of  the Meeting  of  Organization  Beard. 


86  BANK  ORGANIZATION. 

The  Certificate  also  contains  the  clause  "  that  all  legal  re- 
quirements had  been  complied  with,"  such  as  selling  stock,  filling 
out  organization  papers,  purchasing  bonds,  etc. 

Fill  in  blank,  inserting  title  of  bank  and  location,  give  name 
and  residence  and  number  of  shares  of  stock  held  by  each  Direc- 
tor. Be  sure  that  the  number  of  shares  mentioned  in  this  certi- 
ficate corresponds  with  the  number  assigned  to  each  Director  as 
listed  in  the  Organization  Certificate. 


Form   Used   in   Certifying  to  the  Payment  of  50%   of  Capital 
Stock  in  State  Banks.  —  Pennsylvania  Form. 


To  THE  Commissioner  of  Banking 

OF  THE 
COMMONWEAIvTH   OF   PENNSYLVANIA. 

Pursuant  {o  Section  Nine  of  the  Act  of  May  13th,  1876,  as  amended 

by  the  Act  of  February  nth,  1895,  we   do  hereby  certify  that 

per  cent,  of  the  Capital  Stock   of  the^ 

of ,  Pa.,  incorporated    under   the  Act   above 

referred  to,  amounting  to  $ ,  has  been  paid  in,  in  cash. 

^President. 

Cashier. 


Commonwealth  of  Pennsylvainia, 
County   of  


l-ss  : 


Before  me,  a  Notary  Public  in  and  for  said  county  and  State,  came, 

on 191     , President^ 

and Cashier,  of  the  above  named  bank, 

who,  being  duly  sworn,  depose  and  say  that  the  statement  made  in  the  fore- 
going Certificate  ts  true  and  correct. 


Notary  Public. 
My  commission  expires . 


BANK  ORGANIZATION.  87 

Minutes  of  the Meeting  of  Organization  Board. 


88 


BANK  ORGANIZATION. 


Certificate  of  Officers  and  Directors  Relative  to  Payment  of 

Capital  Stock  and  Compliance  with  Other 

Legal  Requirements. 


IQ.  .. 


The  undersigned,  Officers  and  Directors  of 

located  at 

organized  under  the  provisions  of  the  Revised  Statutes  of  the 
United  States  authorizing  the  organization  of  national  banking 
associations,  do  hereby  certify  that  of  the  authorized  capital  stock 

of  $ there  has  been  paid  into  said  bank,  in  cash,  as 

permanent  capital,  $ ,  and  that  no  part  of  this  sum  is 

represented  by  promissory  notes  or  other  evidences  of  debt ;  also 
that  the  name  and  place  of  residence  of  each  Director,  and  the 
amount  of  stock  individually  owned  in  good  faith,  are  as  follows : 


*NAME  OF  DIRECTOR. 

PI.ACE  OF  RESIDENCE. 
(Town  or  City  and  State.) 

Number  of  Share.s 
OK  Stock. 

f  See  organization  certificate) 

I 

2 

3 

1 

4 

1 

6 

The  names,  etc.,  of  all  the  directors  of  the  association  should  appear 
on  this  page.  A  majority  of  the  directors,  exclusive  of  the  president  or 
cashier,  must  sign  on  the  following  page  and  make  acknowledgement. 


The  names  of  all  the  Directors  must  be  listed  here.  Be  sure 
that  the  number  of  shares  of  stock  listed  here  correspond  with 
the  number  listed  in  Organization  Certificate.  Directors  need 
not  sign  their  own  names  here. 


BANK  ORGANIZATION.  89 

Minutes  cf  the Meeting  of  Organization  Board. 


90  BANK  ORGANIZATION. 

It  is  further  certified  that  the  association  has  in  good  faith 
comphed  with  all  of  the  provisions  that  are  required  to  be  com- 
plied with  before  receiving  authority  to  commence  the  business 
of  banking. 


Directors. 


The  majority  of  your  Directors  must  sign  their  oiK.ni  names 
here;  /.  e.,  if  you  have  thirteen  Directors,  seven  must  sign  here 
and  the  President  signs  below.  As  the  officer  certifying  to  the 
paper  can  not  certify  also  as  a  Director  to  make  a  majority,  there- 
fore vou  can  not  count  his  name  in  with  the  above  seven. 


President, 
Cashier. 


State  of \ 

[  y5  ; 

County  of ) 

Before  the  undersigned,  a of 

])ersonally  appeared  the  above-named  directors  and  other  officers 
of  the  aforesaid  National  bank,  and  made  oath  that  the  foregoing 
certificate  and  the  matters  and  things  therein  set  forth  are  true 
to  the  best  of  their  knowledge  and  belief. 

Witness  my  hand  and  seal  of  office  this 

day  of ,  19 ... . 


OFFICIAL  SEAL 

OF 

OFFICER 


To  be  acknowledged  before  a  Notary  Public,  Justice  of  the 
Peace  or  Judge  of  Court. 


BANK  ORGANIZATION.  91 

Minutes  of  the Meeting  of  Organization  Board. 


92 


BANK  ORGANIZATION. 


PRELIMINARY   EXAMINATION. 

After  you  mailed  in  your  paper  certifying  that  you  had  col- 
lected 50%  of  the  capital  stock  of  your  bank  and  had  complied 
with  all  other  requirements,  the  Comptroller  will  send  you  a 
personal  representative  to  make  a  preliminary  examination  and 
you  should  have  a  complete  statement  ready  for  him,  show  him 
the  original  subscription  papers,  minutes,  bills  and  receipts  and 
your  bank  book  that  he  can  reconcile  and  balance  your  accounts, 
and  if  you. will  have  all  these  things  ready  for  him,  you  will 
expedite  the  opening  of  your  bank,  for  as  soon  as  the  examiner 
sends  in  his  report  and  it  is  favorable,  you  will  receive  your  per- 
mission to  open  for  business. 

Be  sure  and  have  a  clear  "  Stock  Record."  So  many  fail 
in  this  respect.  Rule  off  a  list  as  per  cut  and  you  will  have  no 
trouble  if  you  make  records  only  of  actual  cash  received. 


Price  of  Stock 


Stock  List  of  National  Bank  of. 


$125.00 


Name. 

I 

Id 
<  ^ 

Dates  of  different  calls. 

Total  should 

No. 

Address.     ^ 

d 

2 

5 

-s 

6 

5 

CO 

0 

to 

1 

15 
u 

X 

amt.  to  Sell- 
ing Price  of 
Stock  instead 
of  Par  Value. 

— 

— 

— 

— 

For  easy  reference,  numbers  should  be  same  as  those  used  in  Organization  Certificate. 


BANK  ORGANIZATION.  92a 


Daily  Banker  and  Stockholder,  N.    V.,    Oct.  1,   '10. 

THE  EXAMINATION  OF  A  BANK  PRIOR   TO  GRANT- 
ING A  CHARTER. 


D.  E.  Ainger,  National  Bank  Examiner  for  Michigan,  dis- 
cussing this,  says : 

PreUminary  to  the  granting  of  a  charter  for  a  new  bank 
it  usually  is  the  practice  of  the  Comptroller  to  request  informa- 
tion from  examiners  operating  in  the  district  as  to  the  financial 
standing  and  the  experience  and  general  repute  of  the  applicants. 
Me  will  also  desire  to  be  advised  as  to  the  local  conditions  and 
if  the  field  offers  opportunity  for  the  establishment  of  a  creditable 
hanking  institution. 

If  the  reports  are  favorable  the  examiner  is  later  ordered 
to  make  a  preliminary  examination  before  the  bank  is  authorized 
to  begin  the  transaction  of  business.  The  instructions  require 
( I ) ,  that  at  such  examination  it  must  be  specifically  ascertained : 
That  the  organization  proceedings  have  been  regular.  (2),  that 
a  list  of  shareholders  should  be  carefully  made,  noting  any 
changes  made  since  the  organization  certificate  was  executed  and 
giving  the  amount  of  shares  subscribed  for  by  each.  (3),  that 
the  examiner  shall  ascertain  if  the  stock  was  sold  in  excess  of 
par,  and,  if  so,  what  disposition  was  made  of  the  premium. 
Also  if  each  subscriber  has  paid  50  per  cent,  of  his  subscription 
to  the  capital  stock,  and  where  the  funds  are  deposited. 

It  is  a  very  easy  matter  to  admit  new  banks  into  the  sys- 
tem, but  it  is  quite  difficult  to  weed  out  an  undesirable  one. 
IJanks  that  have  a  capable  and  honest  board  of  directors  rarely  give 
the  department  cause  for  apprehension  and  seldom,  if  ever,  cause 
loss  to  either  depositors  or  shareholders.  Hence,  in  making  the 
preliminary  examinations,  as  well  as  the  regular  ones,  examiners 
should  be  mindful  that  there  are  unwritten  considerations  that 
should  not  be  ignored,  to  the  end  that  the  Comptroller  should 
be  placed  in  possession  of  a  complete  knowledge  of  all  condi- 
tions bearing  upon  the  subject. 


92b  BANK  ORGANIZATIOX. 

It  was  stated  recently  in  a  prominent  financial  journal  that 
substantially  one-third  of  the  applications  for  authority  to  or- 
ganize new  banks  were  rejected  by  the  Comptroller.  This  is 
surely  a  case  where  an  ounce  of  prevention  was  worth  more  than 
a  pound  of  cure. 

It  has  frequently  happened  that  two  or  more  National  banks 
have  been  established  in  a  community  where  the  public  con- 
venience could  as  well  have  been  satisfactorily  served  by  a  less 
number.  This  condition  is  productive  of  harmful  competition 
and  bad  banking  methods  and  the  Comptroller  has  the  best  in- 
terest of  the  service  in  mind  in  giving  consideration  to  this  phase 
of  the  subject  in  authorizing  the  establishment  of  new  banks. 

We  all  naturally  feel  a  warranted  pride  in  the  National  bank- 
ing system  and  we  welcome  the  establishment  of  new  banks 
in  our  respective  territories.  This  .  sentiment  is  laudable  and 
proper  provided  there  is  a  reason  to  believe  the  new  banks  will 
develop  into  prosperous  institutions. 

It  is  doubtful  if  an  examiner  is  called  upon  to  perform  a 
more  important  service  than  here  outlined.  If  character  consti- 
tutes an  important  element  in  the  establishment  of  personal  credit 
it  is  certainly  no  less  important  in  determining  the  credibility 
of  those  who  propose  to  organize  banking  institutions.  If  un- 
worthy and  speculative  elements  can  be  primarily  barred  from 
National  banks,  much  will  have  been  accomplished  to  justly 
entitle  the  banks  to  public  confidence,  and  it  will  also  greatly 
simplify  the  labors  of  future  supervision. 

On  the  question  of  new  charters  and  modus  operandi  of  pro- 
curing comprehensive  data  for  use  of  the  Comptroller  in  determin- 
ing their  advisibility,  E.  Southall,  National  Bank  Examiner  for 
Southern  Pennsylvania,  says : 

This  subject  has  been  assigned  to  me,  no  doubt,  on  account 
of  my  twenty  years'  experience  in  the  office  of  the  Comptroller 
of  the  Currency,  where  I  last  served  as  chief  of  the  Organiza- 
tion Division,  and  I  will  endeavor  to  briefly  set  forth  the  course 
which  should  be  pursued  to  make  a  satisfactory  examination  for 
the  purpose  of  ascertaining  whether  all  legal  requirements  have 
been  satisfied  in  connection  with  the  organization  of  a  National 
bank  or  the  conversion  of  a  State  bank,  thus  warranting  the 
issuance  of  certificate  authorizing  the  commencement  of  business 
as  a  National  banking  association. 


BANK  ORGANIZATION.  92c 

It  is  advisable  to  proceed  substantially  as  follows : 

Examine  proceedings  of  all  meetings,  articles  of  association, 
organization  certificate  and  any  other  duplicate  papers  retained 
for  the  files  of  the  bank;  also  original  stock  subscriptions,  com- 
paring latter  with  said  certificate,  which  should  contain  a  bona 
fide  list  of  shareholders. 

See  whether  directors  and  officers  were  regularly  elected  or 
appointed,  and  ascertain  salaries  and  bonds  of  officers  and  em- 
ployees. 

Find  out  whether  at  least  50  per  cent,  of  capital  stock  has 
been  paid  in  cash  and  give  name  of  each  shareholder  or  assignee, 
number  of  shares  and  amount  paid  on  capital,  also  amount  paid 
on  surplus,  if  any. 

Ascertain  where  money  received  from  shareholders  other 
than  that  expended  for  bonds,  etc.,  is  on  deposit,  and  whether 
in  name  of  bank,  being  particular  to  verify. 

Information  should  be  submitted  as  to  banking  facilities, 
whether  building  is  owned  or  rented,  insured,  suitable  and  con- 
veniently located,  also  with  regard  to  place  of  location,  popula- 
tion, industries,  etc.,  and  whether  there  is  apparently  sufficient 
business  to  insure  a  successful  career. 

Careful  inquiry  should  be  made  as  to  the  standing  of  direc- 
tors and  officers,  bearing  in  mind  that  it  is  desirable  that  a  bank 
be  organized  and  managed  by  good,  substantial  citizens — in  fact, 
the  best  men  of  the  communit}^  so  far  as  possible. 

When  a  National  bank  is  being  organized  to  succeed  another 
banking  institution,  the  examiner  should,  in  addition  to  pursuing 
the  course  above  outlined,  pass  upon  and  report  as  to  the  char- 
acter and  value  of  the  assests  to  be  purchased  and  transferred 
from  one  bank  to  the  other  after  charter  has  been  issued,  and 
not  before.  From  this  it  will  be  seen  that  the  acquirement  of 
such  assets  as  may  be  taken  under  the  law  must  be  a  distinct 
transaction  and  have  no  connection  with  the  payment  of  capital 
stock,  it  being  necessary  that  at  least  50  per  cent,  of  capital  be 
paid  in  cash  before  charter  is  granted.  A  detailed  examination 
of  the  State  bank  or  other  banking  institution  should  be  made 
if  there  is  no  objection  thereto,  otherwise  only  the  assets  to  be 
acquired. 

Under  .Section  5154,  United  States  Revised  Statutes,  any 
bank  incorporated  by  special  law  or  any  banking  institution  or- 


92d  BANK  ORGANIZATION. 

ganized  under  a  general  law  of  any  State  may  become  a  National 
association.  While,  in  such  a  case,  conversion  papers  must  be 
executed,'  no  moneys  need  be  paid  in  by  shareholders  if  the 
bank  has  a  paid  in  and  unimpaired  capital  stock  of  requisite 
amount.  All  that  is  necessary,  therefore,  is  to  make  a  thorough 
examination  to  determine  whether  the  bank  has  sufficient  solvent 
and  readily  convertible  assets  to  offset  its  liabilities,  such  assets 
as  can  be  held  by  a  National  bank.  The  purchasing  of  assets  is 
not  involved  as,  upon  conversion,  all  of  the  property  of  the  State 
bank  becomes  that  of  the  National  bank,  and  the  latter  is  liable 
for  all  debts  of  the  former. 

In  submitting  report  of  examination  of  a  bank  of  primary 
origin,  succession,  or  conversion,  the  examiner  should  give  the 
department  the  benefit  of  his  judgment  whether  all  proceedings 
have  been  regular  and  conditions  are  such  as  to  justfy  the  issu- 
ance of  certificate  authorizing  the  commencement  of  business. 


BANK    ORGANIZATION.  93 

Minutes  of  the Meeting  cf  Organization  Board. 


94  BANK  ORGANIZATION. 

COMPTROLLER'S  AUTHORITY  TO  COMMENCE  THE 
BUSINESS  OF  BANKING. 

When  the  examiner  who  made  the  preHminary  examination 
of  your  bank  sends  in  a  favorable  report,  yon  will  receive — by 
telegram — permission  to  begin  the  business  of  banking,  and 
your  charter  will  be  mailed  to  you — you  need  not  await  its  ar- 
rival, as  your  telegram  is  your  authority  to  open  your  doors  for 
business. 

COPY  OF  CHARTER. 


Treasury  Department, 
Office  of  Comptroller  of  the  Currency, 


H^ashingtoji, .  19 


Whereas,  by   satisfactory  evidence  presented  to  the  undersigned,   it  has 
been  made  to  appear  that— 

The ,  located  in  the of ,  in  the  county  of 

and  vState  of ,  has  complied  with  all  the  provisions  of  the  statutes  of  the 

United  States  required  to  be  complied  with  before  an  association   shall  be  au 
thorized  to  commence  the  business  of  banking  ; 

Now,  therefore,  I, ,  Comptroller  of  the  Currency,   do  hereby 

certify  that— 


The ,  located  in  the of ,  in  the  county  of- 


and  State  of ,  is  authorized  to  commence  the  business  of  banking  as 

provided  in  section  fifty-one  hundred  and  sixty-nine  of  the  Revised  Statutes  of 
the  United  States. 

In  testimony  whereof  witness  my  hand  and  seal  of  office  this day 

of ,  19 . 


[seal]  Comptroller  of  the  Currency. 


BANK  ORGANIZATION.  95 

Minutes  cf  the  Meeting  of  Organization  Board. 


96 


BANK  ORGANIZATION. 


OATH   OF   PUBLICATION. 

The  certificate  of  the  Comptroller  authorizing  5'our  bank  to- 
open  for  business  must  be  published  for  sixty  days  in  a  newspa- 
per printed  in  the  city  or  county  where  the  bank  is  located  ;  this 
may  be  in  a  weekly  newspaper  or  a  weekly  edition  of  a  daily. 

If  there  is  no  paper  published  in  your  town  or  county,  you 
must  publish  the  following  charter  in  a  newspaper  published 
in  a  locality  nearest  to  your  place  of  business. 

State  of 

f-  ss 
County  of _ 

Cut    the  printed    notice  from  the 
newspaper  and  attach  here. 


Forward  notice  to  Comptroller  of 
Currency  as  promptly  as  possible. 


being  duly  sworn,  deposes  and  says  that  he 
is  the  publisher  of 


a 

newsoaoer  Dublished  in 

the.. 

of 

,  County  of 

,  State  of 

,     and     that 

the  annexed  advertisement  of  the  Comp- 
troller's Certificate  authorizing  the 

_ to  begin  the   business   of 

banking  has  appeared  in  each  issue  of  said 
paper  for  a  period  of  at  least  sixty  days,  be- 
ginning  the 

day    of and 

ending   the 

day  of 19 


Subscribed  and  sworn  to  before  me,    a 

for  the  State  and  County  aforesaid,  this 

day  of ,  19 


in   and 


BANK  ORGANIZATION.  97 

Minutes  of  the Meeting  of  Organization  Board 


98 


BANK  ORGANIZATION. 


Author's  Form  Used  Where  Applications  for  State    Bank 
Charters  Have  to  Be  Advertised. 


OATH  OF  PUBLICATION. 


State  of - — 

County  of 

Cut    the  f tinted    notice  from  the 
newspaper  and  attach  here. 


NOTICE  ! 


N 


OTICE  is  hereby  given  that  an 
application  will  be  made  to 
the  Governor  of  the  vState  of  Penn- 
sylvania, on  the  22nd  day  of  April, 
1910,  bv  Jno.  R.  Baer,  James  I^au 
and  lyiovd  I,.  Bentz,  citizens  of 
the  Commonwealth  of  Pennsyl- 
vania, under  the  provisions  of  an 
Act  of  General  Assembly  of  the 
Commonwealth  of  Pennsylvania, 
approved  the  13th  day  of  May,  A. 
D.  1876,  entitled  "An  act  for  the 
incorporation  and  regulation  of 
Banks  of  discount  and  deposit." 
and  the  supplements  thereto,  for 
the  Charter  of  an  intended  corpo- 
ration to  be  called  "Farmers  and 
Merchants  Bank,"  and  to  be  lo- 
cated in  the  borough  of  Dillsburg, 
and  countv  of  York.vState  of  Penn- 
sylvania, for  the  purpose  of  car- 
rying on  the  business  of  Banking 
under  the  provisions  of  the  Act 
aforesaid  and  the  supplements 
theieto.  The  amount  of  the  Cap- 
ital Stock  is  525,000.00  divided  in- 
to 500  shares  of  Fifty  Dollars  each. 
John  R.  Baer, 
James  I,au, 
Lloyd  t,.  Bentz. 


Forward  notice  to  Coramis.sioner  of 
Banking  as  promptly  as  possible. 


ss : 


being  duly  sworn,  deposes  and  says  that  he 
is  the  publisher  of 


newspaper  published  in 


the. 
of 


,  County  of 

,  State  of 

,     and     that 

the   annexed   advertisement   of   application 

tor  Charter  of  the 

has  appeared  in  issue  of 


said  paper  for  thirteen  consecutive   weeks, 

beginning    the „ 

day    of and 

ending   the 

day  of 19 


Subscribed  and  sworn  to  before  me,  a 
for  the  State  and  County  aforesaid,  this  „.. 
day  of ,  19 


in   and 


BANK  ORGANIZATION.  99 

Minutes  of  the *  Meeting  of  Organization  Board. 


BANK  ORGANIZATION. 


Form  Used  by  Author  When  Application  for  State  Bank 
Charters  Have  to  Be  Advertised  Previous  to  Char- 
ter Being  Granted,  as  in  Pennsylvania. 


NOTICE. 

Notice  is  hereby  given  that  an  application  will  be  made  to 

the  Governor  of  the  State  of  Pennsylvania,  on  the 

day  of 1910,  by   

citizens  of  the  Commonwealth  of  Pennsylvania,  under  the  provi- 
sion of  an  Act  of  General  Assembly  of  the  Commonwealth  of 
Pennsylvania,  approved  the  13th  day  of  May,  A.  D.  1876,  entitled 
"  An  Act  for  the  incorporation  and  regulation  of  Banks  of  dis- 
count and  deposit,"  and  to  be  called  '' ," 

and  to  be  located  in  the of , 

county  of ,  State  of  Pennsylvania,  for  the  pur- 
pose of  carrying  on  the  business  of  Banking  under  the  provi- 
sions of  the  Act  aforesaid  and  the  supplements  thereto.     The 

amount  of  the  Capital  Stock  is  $ ,  divided  into 

shares  of  fifty  dollars  each. 


To  be  signed  by  three  of  the  petitioners,  embodying  in  the 
application  the  names  of  six  or  eight  of  your  strongest  m.en, 
thereby  giving  your  application  a  standing  in  your  community. 


BANK  ORGANIZATION.  loi 


Form  Used  by  Author  When  Application  for  State  Bank 
Charters  Have  to  Be  Advertised  Previous  to  Char- 
ter Being  Granted,  as  in  Pennsylvania. 


NOTICE. 

(|25,ooo  Bank.) 


Notice  is  hereby  given  that  an  application  will  be  made  to 

the  Governor  of  the  State  of  Pennsylvania,  on  the 

day  of 1910,   by  . ,   , 

citizens  of  the  Commonwealth  of  Pennsylvania,  under  the  provi- 
sion of  an  Act  of  General  Assembly  of  the  Commonwealth  of 
Pennsylvania,  approved  the  13th  day  of  May,  A.  D.  1876,  entitled 
'  'An  Act  for  the  incorporation  and  regulation  of  Banks  of  dis- 
count and  deposit,"  and  Act  of  May  3,  1909,  and   to   be  called 

" , "  and  to  be  located  in  the 

of ,  county 

of ,  State  of  Pennsylvania,  said 

of  /. having  less  than  5000  inhabitants,  for 

the  purpose  of  carrying  on  the  business  of  Banking  under  the 
provisions  of  the  Acts  aforesaid  and  the  supplements   thereto. 

The  amount  of  the  Capital  Stock  is  J divided 

into shares  of  fifty  dollars  each. 


This  form  to  be  used 
for  banks  having  |;25,ooo 
Capital  Stock. 


To  be  signed  by  three  of  the  petitioners,  embodying  in  the 
application  the  names  of  six  or  eight  of  your  strongest  men, 
thereby  giving  your  application  a  standing  in  your  community. 

Note. — These  forms,  being  used  in  the  State  of  Pennsylvania,  are  only 
given  here  as  a  guide  for  organizers  in  other  States  and  not  as  the  forms  to 
be  used  outside  of  Pennsylvania.  Form  on  page  100  is  used  for  banks  hav- 
ing capital  stock  of  |5o,ooo.  on  page  loi  for  $25,000  banks  only. 


I02  BANK  ORGANIZATION. 


RESERVE  AGENTS. 


After  having  gone  so  far  with  your  organization,  it  is  time 
you  should  make  arrangements  to  have  your  Reserve  Agents 
appointed.  It  is  best  to  ask  for  two  appointments,  the  one  a 
New  York  bank,  the  other  a  bank  in  your  nearest  reserve  city. 

The  reserve  cities  are :  Albany,  Baltimore,  Brooklyn^ 
Boston,  Cedar  Rapids,  Cincinnati,  Cleveland,  Columbus,  Dallas, 
Denver,  Des  Moines,  Detroit,  Dubuque,  Fort  Worth,  Houston, 
Indianapolis,  Kansas  City,  Mo. ;  Lincoln,  Los  Angeles,  Louisville, 
Milwaukee,  Minneapolis,  New  Orleans,  Omaha,  Philadelphia, 
Pittsburg,  Portland,  St.  Joseph,  St.  Paul,  Salt  Lake  City,  San 
Francisco,  Savannah,  Washington,  Wichita.  So  choose  the  one 
in  the  town  nearest  to  your  bank,  notify  the  bank  of  your  desire 
and  they  will  attend  to  all  the  necessary  details  for  you. 

The  law  requires  all  banks  to  have  on  hand  in  lawful 
money  of  the  United  States  at  least  25  per  cent,  of  their  de- 
posits, if  situated  in  "  Reserve  Cities  ;"  in  all  others  at  least  15 
per  cent,  of  their  deposits.  Three-fifths  of  this  15  per  cent.  Re- 
serve may  be  kept  in  Reserve  City  banks,  approved  by  the 
Comptroller. 

In  selecting  such  reserve  agencies  it  is  very  important  that 
a  wise  selection  be  made.  The  whole  future  success  of  the  bank 
may  depend  on  having  relations  with  banks  that  will  treat  the 
new  organization  with  liberality  and  consideration. 

U.  S.  BONDS  TO  SECURE  CIRCULATION. 

National  Banks  with  a  capital  of  $50,000  or  less  are  required 
to  deposit  bonds  equal  to  one-fourth  of  their  capital,  and  at  least 
$50,000  must  be  deposited  by  banks  with  capital  over  $150,000. 
Banks  may  or  may  not  issue  circulating  notes ;  these  notes  may 
be  issued  equal  to  the  par  value  of  the  bonds,  not  exceeding  the 
amount  of  paid-in  capital  stock. 

The  best  way  for  you  to  do  is  to  mail  New  York  draft  for 

a  little  more  than  the  amount  of  bonds  you  wish  to  purchase  to 

your  nearest  reserve  agent  and  let  them  purchase  the  bonds  for 

you   and   transmit   same    to   Washington,    as   they   are   better 


BANK  ORGANIZATION.  103 

Minutes  of  the Meeting  of  Organization  Board. 


I04  BANK  ORGANIZATION. 

qualified  to  judge  which  bouds  to  purchase.     You  will  always 
find  your  reserve  agents  willing  to  oblige  you  in  this. 

You  order  your  circulation  in  proportion  to  amount  of  bonds 
you  wish  to  purchase,  i.  e.,  if  you  invest  only  the  minimum 
amount  of  25  per  cent,  of  your  capital  stock,  you  order  one  and 
one-half  times  that  amount  of  currency. — See  note  on  order  sheet 
for  more  explicit  instructions  and  also  the  answer  received  to 
one  order  that  was  wrongly  placed. 


BANK  ORGANIZATION.  105 

Minutes  of  the Meeting  of  Organization  Board. 


io6 


BANK  ORGANIZATION. 


Letter 

Series  of  1Q02. 

ORIGINAL  ORDER  FOR  PLATES  AND  CIRCULATION. 

Charter  No. 
NATIONAL BANK  OF 


,    ip. 


To  THI^  CoMPTROIvLKR  OF  TIIK  CuRRKNCY.     • 

Sir: 

You  are  requested  to  have  plates  engraved  for  this  bank, 
the  cost  to  be  paid  upon  demand,  and  circulating  notes  printed 
therefrom  as  follows : 


Cost  of 
'Plates 


to- 
ys 

75- 

50. 


No.  of  Sheets 
Ordered. 


Denominations  on 
Sheets. 


$5,  $5,  $5,  $5 

|jo,  |io,  |ro,  |2o.. 
$10,  |io,  |io,  |io.. 
$50,  |ioo 

ToTAIv 


VaUie  Per 
Sheet. 


$20.., 
50.. 
40  ., 
150. 


Amount  of 
Order 


Respectfully, 


Cashier. 

Note. — Original  orders  for  circulation  should  be  as  nearly  one  and 
one-half  in  amount  of  the  par  value  of  bonds  to  be  deposited  as  can  be 
made  from  multiples  of  the  face  value  of  sheets  of  notes  ordered.  Cir- 
culation ordered  in  excess  of  the  bonds  deposited  will  be  required  to 
replace  mutilated   notes   returned   for  redemption   and   destruction. 

The  Act  of  March  14,  1900,  provides  that  no  national  bank  shall  be  en- 
titled to  receive  from  the  Comptroller,  or  to  issue  more  than  one-third 
in  amount  of  its  circulating  notes  of  the  denomination  of  $5.  Banks  de- 
siring the  full  amount  of  circulation  to  which  they  are  entitled,  including 
notes  of  the  denomination  of  $5,  must  order,  at  least,  two  plates. 

It  will  require  about  forty  days  to  engrave  the  plate  and  to  print 
circulating  notes,  but  the  order  can  not  be  acted  upon  until  all  legal 
requirements  are  satisfied,  including  the  deposit  of  bonds  with  the 
Treasurer  of  the  United  States,  as  the  charter  number  of  the  association, 
which  can  not  be  previously  determined,  must  appear  upon  the  plate  from 
which  the  notes  are  printed. 


BANK  ORGANIZATION.  I07 

Minutes  of  the Meeting  of  Organization  Board. 


io8  BANK  ORGANIZATION. 

Letter  Book  IV. 

NOTICE  OF  ORDER  TO  ENGRAVE  PLATE. 

Treasury  Department,  Office  of  the  ComptroleEr  of  the 

Currency. 

Washington,  D.  C, ,  19.  .  . . 

Cashier 
Sir: 

The  Director  of  the  Bureau  of  Engraving  and  Printing  has 
this  day  been  requested,  as  per  your  original  order,  to  prepare 

plate $10,  $10,  $10,  $20, for  your  bank,  and 

to  print  therefrom  $22,500.       Order  has  been  increased  to  meet 
the  requirements  of  the  Act  of  May  30,  1908. 

When  ready,  which  will  be  in  about  forty-five  days,  the 
amount  due  will  be  forwarded,  and  the  balance  held  in  the  vault 
of  this  office  to  reimburse  your  bank  for  any  of  its  mutilated 
notes  that  may  be  redeemed  and  destroyed. 

Please  remit  draft  on  New  York  for  $75  (Note),  to  the  order 
of  the  Comptroller  of  the  Currency,  to  pay  for  the  plate. 

Respectfully, 

W.  J.  Fowler, 
Deputy  Comptroller. 

Should  you  desire  some  $5.00  notes,  you  would  have  to  pur- 
chase an  additional  plate  at  the  expense  of  $75.00. 

VOTING  POWERS  OF  STOCKHOLDERS. 

In  all  elections  of  directors,  and  in  deciding  all  questions 
at  meetings  of  shareholders,  each  shareholder  shall  be  entitled 
to  one  vote  on  each  share  of  stock  held  by  him.  Under  section 
5144,  shareholders  may  vote  by  proxies  duly  authorized  in  writ- 
ing, but  no  officer,  clerk,  teller,  or  bookkeeper  of  the  association 
can  act  as  proxy,  and  no  shareholder  whose  liability  is  past  due 
and  unpaid  shall  be  allowed  to  vote.  The  Comptroller,  sup- 
ported by  certain  decisions  of  the  courts,  holds  that  a  director  is 
an  ofUccr  within  the  meaning  of  said  section,  and,  furthermore, 
that  the  prohibition  with  regard  to  the  voting  of  stock  by  a  share- 
holder who  is  liable  to  the  bank  merely  applies  to  subscriptions 
to  capital  stock. 


BANK  ORGANIZATION.  109 

Minutes  of  the Meeting  of  Organization  Board. 


BANK  ORGANIZATION. 


CUMULATIVE   VOTING. 

Cumulative  voting  at  meetings  of  national  banking  asso- 
ciations is  not  permissible.  For  instance,  if  a  shareholder  is  the 
owner  of  ten  shares  of  stock  and  seven  directors  are  to  be  elected, 
he  can  not  cast  seventy  votes  in  favor  of  any  one  person  as  a 
director,  but  can  only  cast  ten  votes  for  each  of  the  seven  candi- 
dates, or  for  as  many  of  the  seven  as  he  sees  fit. 

FORAI  OF  PROXY. 

Know  all  men  by  these  presents  that  I, ,  do  hereby 

constitute  and  appoint attorney  and  agent  for  me,  and  in 

my  name,  place,  and  stead  to  vote  as  my  proxy  at  any  and  all  elections 

of  directors  of according  to  the  number  of  votes  I  should 

be  entitled  to  vote  if  there  personally  present. 

In  witness  whereof  I  have  hereunto  set  my  hand  this day  of , 

one  thousand  nine  hundred  and  . 


Signed  in  presence  of — 


BANK  ORGANIZATION.  in 

Minutes  of  the  Meeting  of  Organization  Board. 


BANK  ORGANIZATION. 


WHAT  YOUR  WASHINGTON  AGENTS  WILL  DO  FOR 

YOU. 

The  relation  of  a  National  Bank  to  the  government  requires 
that  it  be  represented  by  attorney  before  the  Treasury  Depart- 
ment, under  Section  5184  of  the  Bank  Act  and  Treasury  Regula- 
tions, to  attend  to  the  counting,  examining  and  witnessing  the 
destruction  of  its  circulating  notes  redeemed,  which  are  unlit  for 
further  use,  and  under  Section  5166  to  examine  annually  the 
bonds  of  the  bank  on  deposit  with  the  U.  S.  Treasurer. 

In  addition  to  these  regular  duties  there  are  many  other 
matters  which  from  time  to  time  call  for  personal  and  experi- 
enced services  at  the  Department,  and  for  this  reason  the  writer's 
company  has  entered  into  an  arrangement  with  the  firm  of  A.  S. 
Pratt  and  Sons,  of  Washington,  D.  C  to  represent  before  the 
Department  the  banks  they  organize,  as  this  firm  has  acted  as 
attorney  for  National  Banks  from  the  inauguration  of  the  Na- 
tional Banking  System. 

Besides  performing  the  above  named  duties  for  our  banks, 
they  also  render  a  great  many  other  valuable  services,  viz : 

1.  They  furnish  bonds  to  secure  charter  and  circulation. 

2.  They  make  lawful  money  deposits  to  withdraw  bonds 
for  banks  reducing  circulation. 

3.  They  wire  the  date  the  Comptroller  calls  for  statement 
of  condition  of  banks  as  soon  as  announced,  thus  avoiding  the 
delay  of  mail  and  saving  valuable  time. 

4.  They  send  the  new  currency  of  banks  by  registered  mail, 
insured,  when  cheaper  than  by  express,  serving  over  one  thousand 
banks  in  this  way. 

5.  They  attend  to  a  great  variety  of  matters  for  the  banks 
at  the  Department,  and  answer  innumerable  letters  and  questions 
concerning  the  rights  and  restr*ictions  under  the  Bank  Act. 

In  brief,  they  make  the  interests  of  the  banks  their  own, 
looking  carefully  after  their  business,  and  as  their  office  is  situ- 
ated directly  opposite  the  Department,  they  can  do  this  all  the 
more  readily,  and  they  are  constantly  at  the  Department  attend- 
ing to  a  great  variety  of  matters  for  their  correspondents. 


BANK  ORGANIZATION.  113 

Minutes  of  the Meeting  of  Organization  Board 


314  BANK  ORGANIZATION. 

BY-LAWS. 


A  copy  of  the  by-laws  must  be  filed  in  the  Comptroller's  of- 
fice as  soon  as  adopted. 

By-laws  must  conform  to  the  requirements  of  the  national 
banking  laws  and  your  articles  of  association  and  can  not  be 
changed  in  any  way  conflicting  wdth  either. 

GENERAL  FORM  FOR  BY-LAWS. 

By-laws  of  the organized  under  the 

laws  of  the  United  States,  and  authorized  by  the  Comptroller  of  the  Cur- 
rency to  carry  on  the  business  of  banking. 

ELECTIONS. 

1.  The  regular  annual  meetings  of  stockholders  of  this  bank  for 
the  election  of  directors  and  for  the  transaction  of  other  legitimate'  busi- 
ness, shall  be  held  between  the  hours  of  ten  o'clock  a.  m.  and  three 
o'clock  p.  m.  on  the  day  specified  in  the  articles  of  as^o-iation,  and  the 
thirty  days'  notice  of  the  time  and  objcf^.  of  su^h  meecirgs  thereby  re- 
quired shall  be  given  by  the  president,  vice-president,  or  er. shier,  by  pub- 
lication  in .     The   board   of   directors   shall,   v»rithin 

one  month  previous  to  the  date  fixed  for  such  meetings,  appoint  three 
stockholders  to  be  judges  of  the  election  for  di'ectors,  who  shall  hold 
and  conduct  the  election,  and  who  shall,  under  their  hands,  notify  the 
person  acting  as  cashier  of  this  bank  of  the  result  thereof  as  soon  as 
ascertained,  and  of  the  names  of  the  directors-elect. 

2.  The  person  acting  as  cashier  shall  thereupon  cause  the  returns 
made  by  the  judges  of  election  to  be  recorded  upon  the  nn'nute-book  of 
the  bank,  and  shall  notify  the  directors  chosen  of  the"r  election,  and 
of  the  time  for  them  to  meet  at  the  banking  house  for  the  organization 
of  the  new  board.  If  at  the  time  fixed  for  such  meetings  there  should 
be  no  quorum  in  attendance,  the  directors-elect  present  may  adjourn  from 
time  to  time  until  a  quorum  shall  be  obtained. 

3.  The  directors-elect  shall  meet  for  organization,  upon  the  notifi- 
cation given  in  accordance  with  law  2,  within  one  week,  from  the  time 
of  their  election,  but  shall  not  do  any  business  whatever  prior  to  quali- 
fying by  taking  the  oath  of  office  as  required  by  law. 

4.  If  the  annual  election  for  directors  should  not  be  held  on  the 
day  fixed  by  the  articles  of  association,  the  directors  in  office  shall  order 
a  special  election,  of  which  notice  shall  be  given,  judges  appointed,  and 
returns  made  and  recorded  upon  the  minute-book ;  and  the  directors 
chosen  thereat  shall  be  certified  to  the  cashier,  and  notified  as  provided 
by  laws  i  and  2. 

OFFICERS. 

5.  The  officers  of  this  bank  shall  be  a  president,  vice-president, 
(who  shall  be  members  of  the  board  of  directors),  cashier,  and  such 


BANK  ORGANIZATION.  115 

Minutes  of  the Meeting  of  Organization  Board. 


ii6  BANK  ORGANIZATION. 

other  officers  as  may  be  required  from  time  to  time  for  the  prompt  and 
orderly  transaction  of  its  business ;  and  all  officers,  clerks,  and  agents 
shall  be  elected,  appointed,  or  employed  by  the  board  of  directors,  or 
with  the  consent  thereof,  and  their  several  duties  may  be  prescribed  by 
the  board. 

6.  The  president  shall  hold  his  office  for  the  current  year  for  which 
the  board  of  which  he  shall  be  a  member  was  elected,  unless  he  shall 
resign,  become  disqualified,  or  be  removed ;  and  any  vacancy  occurring 
be  filled  by  the  remaining  members. 

7.  The  cashier  and  the  subordinate  officers  and  clerks  shall  be  ap- 
pointed to  hold  their  offices  respectively  during  the  pleasure  of  the  board 
of  directors. 

8.  The  cashier  of  this  bank  shall  be  responsible  for  all  the  moneys, 
funds,  and  valuables  of  the  bank,  and  shall  give  bond,  with  security  to 
be  approved  by  the  board,  in  the  penal  sum  of  dollars,  condi- 
tioned for  the  faithful  and  honest  discharge  of  his  duties  as  such  cashier, 
and  that  he  will  faithfully  apply  and  account  for  all  such  moneys,  funds, 
and  valuables,  and  deliver  them  to  the  order  of  the  board  of  directors 
of  this  bank,  or  to  the  person  or  persons  authorized  to  receive  them. 

9.  The  president  of  the  bank  shall  be  responsible  for  all  such  sums 
of  money  and  property  of  every  kind  as  may  be  intrusted  to  his  care  or 
placed  in  his  hands  by  the  board  of  directors  or  by  the  cashier,  or  other- 
wise come  into  his  hands  as  president,  and  shall  give  bond,  with  securi- 
ty to  be  approved  by  the  board,  in  the  penal  sum  of dollars, 

conditioned  for  the  faithful  discharge  of  his  duties  as  such  president, 
and  that  he  will  faithfully  and  honestly  apply  and  account  for  all  sums 
of  money  and  other  property  of  this  bank  that  may  come  into  his  hands 
as  such  president,  and  pay  over  and  deliver  them  to  the  order  of  the 
board  of  directors,  or  to  any  other  person  or  persons  authorized  by  the 
board  to  receive  them. 

10.  The  teller  shall  be  responsible  for  all  such  sums  of  money, 
property,  and  funds  of  every  description  as  may  from  time  to  time  be 
placed  in  his  hands  by  the  cashier,  or  otherwise  come  into  his  posses- 
sion as  teller,  and  shall  give  bond,  with  security  to  be  approved  by  the 

board  of  directors,  in  the  penal  sum  of  dollars,  conditioned 

for  the  honest  and  faithful  discharge  of  his  duties,  and  that  he  will 
faithfully  apply,  account  for,  and  pay  over  all  moneys,  property,  and 
funds  of  every  description  pertaining  to  this  bank  that  may  come  into 
his  hands  by  virtue  of  his  office  as  teller,  to  the  order  of  the  board  of 
directors,  or  to  such  person  or  persons  as  may  be  authorized  by  the 
board  to  receive  them. 

11.  The  bonds  of  the  officers  shall  be  placed  in  the  custody  of  a 
stockholder  of  this  bank,  to  be  designated  by  the  board  of  directors,  who 
.shall  not  be  one  of  the  bonded  officers,  to  be  surrendered  by  him  only 
upon  the  order  of  the  board. 

SEAL. 

12.  The  impression  made  below  is  an  impression  of  the  seal  adopted 
by  the  board  of  directors  of  this  bank. 


BANK   ORGANIZATION.  117 

Minutes  of  the Meeting  of  Organization  Board. 


ii8  BANK  ORGANIZATION. 

CONVEYYANCE  OF  REAL  'ESTATE. 

13.  All  transfers  and  conveyances  of  real  estate  shall  be  made  by 
the  bank,  under  the  seal  thereof,  in  accordance  with  the  orders  of  the 
board  of  directors,  and  shall  be  signed  b}-  the  president  or  cashier. 

INCREASE  OF  CAPITAL  STOCK. 

14.  Whenever  an  increase  of  stock  shall  be  determined  upon  in  • 
accordance  with  the  articles  of  association  of  this  bank,  it  shall  be  the 
duty  of  the  board  of  directors  to  cause  all  the  stockholders  to  be  noti- 
fied thereof,  and  a  subscription  to  be  opened  therefor,  specifying  the 
terms  of  payment  agreed  upon  by  subscribers.  Eeach  stockholder  shall  be 
entitled  to  subscribe  for  shares  of  the  new  stock  in  proportion  to  the  num- 
ber of  shares  he  already  owns ;  but  if  any  stockholder  shall  fail  to  sub- 
scribe for  such  new  stock  as  he  may  be  entitled  to,  or  to  pay  his  sub- 
scription according  to  agreement,  the  board  of  directors  shall  determine 
what  disposition  shall  be  made  of  the  privileges  of  subscribing  for  the 
new  stock  not  taken. 

BUSINESS  OF  THE  BANK. 

15.  The  bank   shall   be  open   for   business   from o'clock  a.   m. 

to  o'clock  p.  m.  each  day,  except   Sundays  and  days  recognized  by 

the  laws  of  this  State  as  holidays. 

16.  The  board  of  directors  of  this  bank  shall  hold  regular  meet- 
ings at  the  banking-house  for  the  transaction  of  business  on 

of  each  week,  and  should  that  day  in  any  year  fall  upon  a  holiday,  the 
regular  meeting  for  that  week  shall  be  held  on  such  other  day  as  the 
directors  at  the  preceding  meeting  may  order. 

The  board  may  also  hold  special  meetings  upon  the  call  of  the  presi- 
dent, cashier,  or  any  three  or  more  members,  and  whenever  there  shall 
not  be  a  quorum  at  a  regular  or  special  meeting,  the  members  present 
may  adjourn  the  meeting  from  day  to  day  until  a  quorum  shall  be  ob- 
tained; and  any  meeting  may  be  adjourned  from  time  to  time  by  a  vote 
of  a  majority  of  a  quorum  present,  but  no  business  except  adjournment 
shall  be  transacted  in  the  absence  of  a  quorum. 

17.  There  shall  be  a  committee,  to  be  known  as  the  exchange  com- 
mittee,  consisting   of   the   president,   directors,    and    cashier,    whq 

shall  have  power  to  discount  and  purchase  bills,  notes,  and  other  evi- 
dences of  debt,  and  to  buy  and  sell  bills  of  exchange ;  and  who  shall, 
at  each  regular  meeting  of  the  board  of  directors,  make  a  report  of  all 
bills,  notes,  and  other  evidences  of  debt  discounted  and  purchased  by/ 
them  for  the  bank  since  their  last  previous  report,  this  report  shall  be  ap- 
proved by  the  Board  and  duly  recorded. 

18.  The  board  of  directors  may  appoint  one  of  its  members  or  an 
officer  of  the  bank  to  act  as  its  secretary. 

19.  No  officer  or  clerk  of  this  bank  shall  pay  any  check  drawn  upon 
it,  or  pay  out  money  on  any  order,  unless  the  drawer  of  such  check  or 
order  shall,  at  the  time  of  the  presentation  thereof,  have  on  deposit  in 
the  bank  funds  sufficient  to  meet  such  check  or  order. 

20.  The   earnings   of   this   bank   shall   be   disposed   of    according   to 


BANK  ORGANIZATION.  119 

Minutes  of  the Meeting  of  Organization  Board. 


I20  BANK  ORGANIZATION. 

orders  of  the  board  of  directors,  made  at  regular  or  special  meetings, 
and  no  dividend  shall  be  paid  to  stockholders,  or  other  disposition  of 
earnings  made,  except  upon  order  of  the  board. 

21.  The  organization  papers  of  this  bank,  as  executed  and  filed 
with  the  Comptroller  of  the  Currency,  the  returns  of  judges  of  the 
elections,  the  proceedings  at  all  regular  and  special  meetings  of  the  board 
of  directors,  the  by-laws,  and  all  changes  and  all  amendments  thereof, 
and  the  report  of  examining  committeess  of  directors,  made  according 
to  law  28,  shall  be  recorded  in  the  minute-book;  and  the  minutes  of 
each  meeting  of  the  board  shall  be  signed  by  the  president  and  attested 
by  the  cashier. 

22.  The  board  of  directors  shall  have  power  to  prescribe  and  when 
expedient,  to  change  the  form  of  books  and  accounts  to  be  used  in  the 
transaction  of  the  business  of  this  bank,  and  to  prescribe  the  general 
or  particular  manner  in  which  its  affairs  shall  be  conducted.  Minute- 
Book  (copy  back  on  cover). 

TRANSFER  OF  STOCK. 

23.  The  stock  of  this  bank  shall  be  assignable  and  transferable  only 
on  the  books  of  this  bank,  subject  to  the  restriction  and  provisions  of 
the  banking  laws,  and  a  transfer  book  shall  be  provided,  in  which  all 
assignments  and  transfers  of  stock  shall  be  made. 

24.  Transfers  of  stock  shall  not  be  suspended  preparatory  to  the 
declaration  of  dividends ;  and  unless  an  agreement  to  the  contrary  shall 
be  expressed  in  the  assignments,  dividends  shall  be  paid  to  the  stock- 
holders in  whose  name  the  stock  shall  stand  at  the  date  of  the  declara- 
tion of  dividends. 

25.  Certificates  of  stock  signed  by  the  president  and  cashier  shall 
be  issued  to  stockholders,  and  the  certificates  shall  state  upon  their 
face  that  the  stock  is  transferable,  and  the  certificates  shall  state  upon 
their  face  that  the  stock  is  transferable  only  on  the  books  of  the  bank. 

EXPENSE. 

26.  All  the  current  expenses  of  this  bank  shall  be  paid  by  the 
cashier,  who  shall,  every  six  months,  or  oftener  if  required,  make  to  the 
board  of  directors  a  detailed  statement  thereof. 

CONTRACTS. 

27.  All  contracts,  checks,  drafts,  etc.,  for  this  bank,  and  all  receipts 
for  circulating  notes  received  from  the  Comptroller  of  the  Currency, 
shall  be  signed  by  the  president  or  cashier. 

EXAMINATIONS. 

28.  There  shall  be  appointed  by  the  board  of  directors  a  commit- 
tee of members  thereof,  whose  duty  it  shall  be  to  examine  every 

three  months  the  affairs  of  this  bank,  to  count  its  cash,  and  compare  its 
assets  and  liabilities  with  the  accounts  of  the  general  ledger,  ascertain 
whether  these  accounts  and  all  others  are  correctly  kept,  whether  the 
condition  of  the  bank  corresponds   therewith,   and   whether  the  bank  is 


BANK  ORGANIZATION.  121 

Minutes  of  the Meeting  of  Organization  Board. 


122  BANK  ORGANIZATION. 

in  a  sound  and  solvent  condition,  and  to  recommend  to  the  board  such 
changes  in  the  manner  of  doing  business,  etc.,  as  shall  seem  to  be  desira- 
ble, the  result  of  which  examination  shall  be  reported  to  the  board 
at  the  next  regular  meeting  thereafter. 

QUORUMS. 

29.  A  majority  of  the  directors,  including  the  president,  (or  in 
his  absence  the  vice-president,)  shall  be  a  quorum  to  do  business. 

AMENDMENTS. 

30.  These  by-laws  may  be  changed  or  amended  by  the  vote  of  two- 
thirds  of  the  directors. 

31.  A  copy  of  the  by-laws  of  this  bank  as  in  force  shall  be  kept 
in  a  convenient  place  in  the  bank,  to  which  any  stockholder  shall  have 
free  access  during  the  regular  hours  of  business. 

32.  No  director  is  to  endorse  any  accommodation  paper  that  is  to 
be  discounted  at  this  bank. 


BANKING  ROOM  AND  FIXTURES. 

Banking  Room. — It  is  needless  to  say  that  the  banking  room 
or  building  should  be  in  as  prominent  a  place  as  it  is  possible 
to  place  it,  as  position  alone  will  be  one  of  its  main  and  strongest 
advertising  features. 

Size  of  Room. — The  size  of  the  banking  room  is  not  of  such 
great  importance.  Of  course,  you  should  have  a  fair  amount  of 
floor  space  and  any  manufacturer  of  bank  furniture  will  pre- 
pare blue  prints  for  you,  showing  just  how  you  have  to  arrange 
your  fixtures  to  the  best  possible  advantage,  thereby  economizing 
valuable  space. 

For  your  guidance  I  might  add  that  a  fair  sized  room  for 
the  average  country  bank  should  be  about  28  by  45  feet  inside 
measurement,  giving  ample  room  for  vaults,  fixtures,  etc. 

Temporary  Quarters. — Should  you  decide  to  go  into  tem- 
porary quarters,  you  should  purchase  your  fixtures  from  a  firm 
that  makes  a  specialty  of  that  class  of  work,  as  they  will  make 
same  in  sections  (knock  down),  so  that  when  you  are  ready  to 
move  into  your  permanent  quarters,  all  you  will  have  to  do  is 
to  add  more  sections  so  as  to  give  you  the  required  desk  space, 
allowing  you  to  use  your  old  furniture,  doing  away  with  all  waste. 

Fixtures. — In  choosing  your  fixtures  do  not  be  too  saving. 
You  can  not  aflford  anything  but  the  best,  as  your  fixtures  are 
one  of  the  objects  by  means  of  which  you  must  impress  your 


BANK  ORGANIZATION.  123 

Minutes  of  the Meeting  of  Organization  Board 


124  BANK  ORGANIZATION. 

future  patrons  after  you  once  get  them  into  your  banking  room, 
for  curiosity  may  tempt  them  to  make  an  inspection  of  your 
bank  and  they  will  look  for  more  elegance  in  your  place  than 
they  would  expect  to  see  in  the  store  on  the  opposite  corner  of 
the  square,  and  they  will  judge  the  future  success  of  the  insti- 
tution by  its  appearance,  and  in  banking,  as  well  as  in  any  other 
business,  nothing  ''  succeeds  like  success,"  and  you  will  find  you 
gain  a  patron,  much  sooner,  if  your  visitor  sees  that  you  have 
good,  substantial  furnishings  in  your  bank.  Especially  should 
you  be  well  prepared  to  show  him  the  preparations  you  have 
made  to  safeguard  any  funds  that  he  might  place  into  your  hands 
for  safe  keeping,  and  you  should  take  especial  care  to  show  and 
explain  to  him  your  nest  of  Safe  Deposit  Boxes. 

Safe. — You  should  purchase  the  best  and  latest  form  of  safes 
on  the  market.  Just  now  those  safes  made  out  of  manganese  steel 
seem  to  have  the  best  reputation,  and  you  can  advertise  them 
without  fear  of  adverse  criticism.  The  writer  has  heard  a  Na- 
tional Bank  Examiner  praise  a  Bank  Board  for  placing  one  of 
these  safes  into  their  vault,  claiming  the  manganese  safes  to  be 
the  best  safes  on  the  market. 

Vaults. — Do  not  make  the  mistake  that  so  many  do  in  build- 
ing their  vaults,  but  remember  that  the  older  your  bank  becomes, 
the  more  vault  space  you  will  require,  and  the  only  chance  you 
will  have  to  prepare  for  your  future  needs  in  this  respect  will 
be  while  you  are  putting  up  your  building;  therefore,  do  not 
be  afraid  of  building  it  too  large;  a  vault  should  never  be  less 
than  8  feet  inside  measurement,  and  where  space  will  permit, 
you  ought  to  build  it  double  length  so  as  to  have  your  Safe 
Deposit  Department  separate  and  distinct  from  your  bank  vault. 

After  deciding  on  building  a  vault,  get  into  communication 
with  your  Safe  and  Vault  Houses  and  get  them  to  send  you  blue 
prints,  which  they  will  be  glad  to  do  without  making  any 
charges  for  same. 


BANK  ORGANIZATION.  125 

Minutes  of  the Meeting  of  Organization  Board. 


126  BANK  ORGANIZATION. 


THE  SOVEREIGN  STATES. 

The  Sovereign  States  and  Territories  and  the  proper  officials 
to  whom  requests  for  information  concerning  the  organization  of 
State  Banks  should  be  addressed  : 

STATE.  BANKING    OFFICIALS. 

1.  Alabama State  Treasurer 

2.  Alaska No  Banking-  Laws  or  Officials 

3.  Arizona  (Territory)  .Territorial  Auditor  (Bank  Controller) 

4.  Arkansas Secretary  of  State 

5.  California State  Board  of  Bank  Commissioners 

6.  Colorado Commissioner  of  Banking 

7.  Connecticut Commissioners   of   Banking 

8.  Delaware Insurance    Commissioner 

9.  District  of  Columbia 

Comptroller  of  the  Currency,  Washington,  D.  C. 

10.  Florida State    Comptroller 

11.  Georgia State  Bank   Examiner 

12.  Hawaii    (Territory) Territorial  Treasurer 

13.  Idaho Commissioner   of   Banking 

14.  Ilhnois State    Auditor 

15.  Indiana State  Auditor 

16.  Iowa State  Auditor 

17.  Kansas Commissioner  of  Banking 

18.  Kentucky Secretary  of  State 

19.  Louisiana State  Bank  Examiner 

20.  Maine Bank   Examiner 

21.  Maryland State   Treasurer 

22.  Massachusetts Board  of  Bank  Incorporation 

23.  Michigan Commissioner  of  Banking 

24.  Minnesota Public  Bank  Examiner 

25.  Mississippi State  Auditor 

26.  Missouri Commissioner  of  Banking 

2.'j.  Montana Secretary   of   State 

28.  Nebraska State   Banking  Board 

29.  Nevada Board  of  Bank  Commissioners 


BANK  ORGAXIZATIOX.  127 

Minutes  of  the  Meeting  of  Organization  Board. 


128  BANK  ORGANIZATION. 

STATE.  BANKING   OFFICIALS. 

30.  New  Hampshire Bank  Commissioners 

31.  New  Jersey Commissioner  of  Banking 

32.  New  Mexico State  Auditor 

33.  New  York ^ Superintendent  of  Banks 

34.  North  Carolina Corporation  Commission 

35.  North  Dakota State  Banking  Board 

36.  Ohio Superintendent  of  Banks 

37.  Oklahoma Commissioner   of   Banking 

38.  Oregon Bank    Commissioners 

39.  Pennsylvania Commissioner  of  Banking 

40.  Rhode  Island Commissioner  of  Banking 

41.  South  Carolina Secretary  of  State 

42.  South  Dakota Secretary  of  State 

43.  Tennessee Comptroller 

44.  Texas Superintendent  of  Banking 

45.  Utah Secretary  of  State 

46.  Vermont Commissioner  of  Banking 

47.  Virginia Corporation    Commission 

48.  Washington Secretary  of  State 

49.  West  Virginia Comissioner  of  Banking 

50.  Wisconsin Commissioner  of  Banking 

51.  Wyoming State  Bank  Examiner 


INDEX. 


PAGE. 

ACKNOWLEDGMENTS: — (See  oaths) 20,    80 

Org-anization  Certificate— - 

Converting    banl^ 20 

De    Novo 28 

ADVERTISEMENTS:  —  (See   publication). 

National    bank 9  4 

State  bank 98,   100,   101 

AGENT: 

Bonds,  examination  by 112 

Circulation,  to  vi^itness  destruction 112 

Reserve     102 

Reserve    central 

Washington    112 

AMENDMENTS: 

Restrictions  to 122,    30 

AFTLICATIONS: 

F'or  conversion  of  state  bank 10 

National  bank,  state  bank  and  trust  companies 24 

AFPOINTMENT: 

Agents  to  examine  bonds 112 

Agents  to  witness  destruction  of  circulation 112 

Directors,  authority  for  appointing  instead  of  electing 56 

Officers     114,      5 

Special    examining   committee 120,    28 

ARTICLES  OP  ASSOCIATION: 

Amendments  of,   restrictions 68 

Converted    state   bank 16,      8 

Form — 

Regular    66 

For  converting  bank 14 

ASSESSMENTS: 

Shareholders'  personal  liability — (See  bank  act). 

ASSIGNMENT: 

Form  of,  for  temporary  certificate 55 

AUTHORITY: 

To  appoint  Board  of  Directors 56,    72 

For  conversion  of  state  into  national 12 

Comptrollers,  to  commence  the  business  of  banking 94 

BANKING  FACILITIES: 

Are  better  banking  facilities  needed ? 30 

BANKING  ROOM: 

Size  and  location 122 

Temporary    quarters 122 

BOARD  OP  DIRECTORS:  — (See  directors). 
Election  of — 

Temporary     3  2 

Permanent     56 

(129) 


I30  BANK  ORGANIZATION. 

PAGE. 

Number,    constituting 3  2 

Sliding  scale    72 

Three-fourths  to  be  residents  of  state 32 

BONDS: 

Amount  required  to  secure  circulation 102 

Annual    examination 112 

Officers — 

Cashier    •. 116,  8 

President     116,  9 

BRANCH  BANKS: 

Laws  relating  to 22 

State  banks  converting,  may  retain 22 

BUSINESS: 

Authorization  of  association  to  begin 94 

Place    of 122 

BY-LAWS: 

Form     of .  .  114 

CAPITAL  STOCK: 

Amount  required  by  national  or  state  banks 28 

Amount  paid  in  before  beginning  business 88 

Of  branches  of  converted  state  banks 22 

Certificate  of  officers  and  directors  relative  to  payment  of — 

National     84,  88 

State   86 

Enforcing  payment  of 4  0 

Minimum  amount  required 28,  2 

Payment  of,  provision  for 52 

Subscription  List — 

Usual    form 36 

Individual   form 52 

Subscriptions  to,  when  payable 52 

CASHIER: 

Appointment    of  116,      7 

Election  of 

Responsibilities    of 116,      8 

CERTIFICATE: 

Comptroller's,  of  authority 94 

ORGANIZATION: 

Acknowledgment   of    78 

Converting  state 18 

National    74 

Officers  and  directors  relative  to  payment  of  capital  stock 84 

Payments  of  installments,  to  be  certified — 

National    88 

State    86 

Payments  of  capital  stock,  to  be  certified — 

Converted  state  bank 20 

National    bank 84 

State    bank 86 

Publication  of  authority  to  begin  the  business  of  banking 97 

CHARTER: 

Copy    of 94 

Number     6  2 

Publication  of — 

National     9  6 

State    98,   100,   101 


BANK  ORGANIZATION.  131 

PAGE. 

CIRCULATION: 

Amount    obtainable 106 

U.  S.  bond  to  secure 102 

CONVERSION: 

Authority   for    12 

Private    banks 24 

State    banks 10 

CUMULATIVE  VOTING: 

What  it  is 110 

National     110 

State    110 

CURRENCY:  —  (See  circulation). 

Amount    obtainable 106 

U.  S.  bonds  to  secure 108 

DEPOSIT  OP  U.  S.  BONDS: 

See    bonds 102 

Destruction  of  mutilated  notes 112 

DIRECTORS: 

Appointment  or  election  of 66,   4,    72 

For  converting  state  bank  to  act  as  directors  of  national  bank   20 

Legality  of  appointing 56 

Number  of  shares  of  stock  required 3  2 

Number    of 32 

Oaths — 

Form     of 80 

Proxy,  can  not  act  as 108 

Qualifications — 

National    32 

State    32 

Selecting     32 

Sliding   scale 7  2 

When  directors  of  state  banks  converting  into  national  banks 

are  empowered  to  act 20 

ELECTIONS: 

Directors'   by   shareholders     114,      1 

Qualification   of  directors  for 108 

Qualication  of  shareholders  to  vote  on 108 

ENGRAVING  OF  PLATE  FOR  CURRENCY: 

Cost     of 106 

Order  for 108 

EXAMINATIONS: 

Preliminary     9  2 

How  to  make  effective 92  a,  b,  c,  d 

FURNITURE   AND    FIXTURES     122 

INSTRUCTIONS,    COMPTROLLERS,    AS    TO    HOW   TO    PILL   IN 

ORGANIZATION     PAPERS 58,    60,    62 

Articles   of   association 58 

Organization    certificate 60 

Oaths  of  directors , 60 

Signatures   of   officers 60 

Certificate    of    officers    and    directors    relative    to    payment    of 

capital  stock 60 

General    instructions 62 

JUSTICE  OF  THE  PEACE: 

Powers    of 80,   90 


132  BANK  ORGANIZATION. 

PAGE. 

MEETINGS: 

Stockholders — 

Regular 114,  1 

Special 114,  1 

MINUTES: 

Record  of right  hand  page  of  book 

MOTIONS: 

Made  and  carried  in  winding  up  affairs  of  organization  board.  .  56 

NOTARY  PUBLIC: 

Acknowledgment  of  organization  certificate  before 64 

Acknewledgment  of  different  reports 64 

Duties  and  powers  of 64 

OATHS: 

Converting    bank 20 

National      80 

State No  copy  furnished 

OFFICERS: 

Bonds,  where  kept 116,  11 

Certificate  of  payment  of  capital  stock 88 

Electionn  or  appointment  of,  by  directors 114,  3 

Oaths,  administration  of 80 

OFFICIALS: 

Empowered   to   administer  oaths  of   office  and   to   receive  ac- 
knowledgements       64 

Signature  of  officials  of  converting  state  banks 22 

Signature  of  national  banks 82 

ORGANIZATION: 

Different  methods — 

De  Novo   (new  bank) 24 

Reorganization    22 

Conversion     10 

ORGANIZATION  BOARD: 

Record  of  formation 7,  9 

Members  of,  and  how  to  form 32 

ORGANIZATION  CERTIFICATE: 

Acknowledgment    of 78 

P''or  converting  state  bank 18 

National    bank 74 

PLATE  CURRENCY: 

Capital  stock,  how  made 52 

PLATE: 

Engraving,    cost    of 106 

PUBLICATON:. 

Application  for  state  charter 9  8,  100,  101 

Certificate  authorizing  national  banks  to  commence  the  busi- 
ness  of   banking 94,  96 

PRELIMINARY    EXAMINATIONS — (See    examinations) 92 

How  to  be  made  effective 9  2  a,  b,  c,  d 

PRESIDENT: 

Duties  of 116 — a 

Miist  be  a  director 68,  6 

PRICE  OF  STOCK 52 

Government's  suggestion  as  to 52  a 

PROSPECTUS: 

Form  of 44,  46,  48,  50 

Value    of 44 


BANK  ORGANIZATION.  133 

PAGK. 

PROXY: 

Form     of 110 

Shareholders    108 

Who  may  not  vote  by 108 

QUALIFICATIONS: 
Directors — 

National    32 

State 32 

QUORUM    122,    29 

REAL  ESTATE: 

Conveyance  of 18,    13 

Holdings  of 

RECORD: 

Election  of  members  and  officers  of  Board  of  Directors 9 

Organization  board 7 

Stock 92 

REORGANIZATION: 

Private    banks ,•  •  •  •    24 

State  banks 22 

RESERVE: 

Agents     102 

Cities 102 

SAFES: 

What  to  purchase 124 

SELLING  STOCK: 

How  and  where 34 

SHARES  OF  STOCK: 

Allotment     38 

Number  of  shares  required  to  be  held — 

By  directors  of  national  banks .  .    32 

By  directors  of  state  banks  converting  into  national  banks.  ...    20 
By  directors  of  state  banks 3  2 

SHAREHOLDERS: 

Meetings    of 114,      1 

Record  of 114,      2 

SIGNATURES: 

Officials  of  converting  state  banks 22 

Officials  of  national  banks 82 

SOVEREIGN   STATES 126 

STOCK: 

Comptroller's  suggestions  as  to  selling  plan  of 52a 

List-form — 

Autographic     40,  42 

Individual     38 

Usual 36 

Selling,   instructions  as  to 34 

Increase    of 118,  14 

Price  of    52 

Record    9  2 

Transfer    of 120,  23 

SUBSCRIPTION  LIST: 

Autographic    40,  4  2 

Individual   form 3  8 

Usual   form 36 

Why  Individual  form  is  preferable 40 


134  BANK  ORGANIZATION. 

PAGE. 

TITLE : 

National    28 

State    28 

VAULTS: 

Size,    etc 124 

VICE  PRESIDENTS: 

Number    of 9 

VOTING: 

Cumulative     110 

Power  of  shareholders 108 

Proxy 110 

Shareholders,  when  not  eligible  to  vote 10  8 

WASHINGTON  AGENTS: 

What  they  will  do  for  you , 112 


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